Contents
Advisors
Directors
M J de Villiers
A K Sener
W J B Payne
C J S Sangster
Secretary
M J de Villiers
Registered Office
2nd Floor, Regis House
45 King William Street
London, EC4R 9AN
Registered Number
05403426
Auditors
PKF Littlejohn LLP
15 Westferry Circus, London, E14 4HD
Bankers
HSBC
186 Broadway, Didcot, Oxfordshire, OX11 8RP
Solicitors
Gowling WLG (UK) LLP
4 More London Riverside, London, SE1 2AU
Joint Broker
Panmure Gordon (UK) Limited
1 New Change, London, EC4M 9AF
Nominated Advisor and Joint Broker
Beaumont Cornish Limited
Building 3, 566 Chiswick High
Road, London, W4 5YA
Registrars
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol, BS13 8AE
Public Relations
Yellow Jersey PR
Mappin House, Oxford St, London, W1W 8HF
Strategic Report
Principal Activities
Strategy & Business Model
Project Investment Strategy
Industry Leading Performance Metrics
Chairman’s Statement
Operations Review
Financial Review
Organisation Review
Directors
Operational Team
Field Team
Key Performance Indicators
Risks & Uncertainties
Section 172(1) Statement
Governance
Corporate Governance
Corporate Responsibility
Report of the Directors
Independent Auditor’s Report
Financial Statements
Notice of the 2021 Annual General
Meeting of Ariana Resources PLC
2
3
4
4
5
6
10
22
23
24
26
28
29
30
34
36
36
40
42
46
52
78
1
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 London
Registered Office
ISTANBUL - LONDON
0.4t CO₂
KOSOVO
Ankara
Head Office
CYPRUS
HARARE - ISTANBUL
0.9t CO₂
TURKEY
KAZAKHSTAN
SINGAPORE - ISTANBUL
2.2t CO₂
LAOS
Harare
Regional Office
GLOBAL GDP
COMMODITIES OF INTEREST
79
47
Au
Gold
Ag
Silver
PRECIOUS
METALS
AMERICAS*
35%
29
28
27
EASTERN
HEMISPHERE
65%
*USA accounts for 20% of global GDP alone
2
Cu
Copper
42
30
Mo
Molybdenum
Ni
Nickel
Zn
Zinc
Co
Cobalt
TECHNOLOGY
METALS
INDUSTRIAL
METALS
92
U
Uranium
ENERGY
METALS
PERTH - SINGAPORE
0.6t CO₂
Zenit Madencilik
Western Tethyan Resources
Venus Minerals
Asgard Metals Fund
AUSTRALIA
Perth
Regional Office
Economy Class Flights
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 London
Registered Office
ISTANBUL - LONDON
0.4t CO₂
KOSOVO
Ankara
Head Office
CYPRUS
HARARE - ISTANBUL
0.9t CO₂
TURKEY
KAZAKHSTAN
SINGAPORE - ISTANBUL
2.2t CO₂
Principal Activities
The principal activities of the Company and its
subsidiaries are the exploration and development
of precious and technology metals. The primary
area of geological focus is the globally significant
Tethyan Metallogenic Belt, which spans over
10,000km from central Europe through to the
Himalayas and beyond. This metallogenic belt
hosts some of the world’s largest gold, silver and
copper deposits.
The Company aims to advance mineral resource
opportunities both within its primary area of
operations in Turkey and across the wider
south-eastern European region, within which
the Company has specific expertise. Beyond
this area of interest, various mineral exploration
opportunities are being evaluated elsewhere
across the Eastern Hemisphere, particularly
those which contribute toward technological
development, energy efficiency and the global
decarbonisation agenda.
Harare
Regional Office
GLOBAL GDP
COMMODITIES OF INTEREST
79
47
PRECIOUS
METALS
AMERICAS*
35%
29
28
27
Au
Gold
Cu
Copper
Mo
Molybdenum
Ag
Silver
Ni
Nickel
Zn
Zinc
Co
Cobalt
TECHNOLOGY
METALS
INDUSTRIAL
METALS
ENERGY
METALS
92
U
Uranium
EASTERN
HEMISPHERE
65%
42
30
*USA accounts for 20% of global GDP alone
LAOS
Dymaxion projection of the eastern
hemisphere scales countries more
realistically than other map projections.
PERTH - SINGAPORE
0.6t CO₂
Zenit Madencilik
Western Tethyan Resources
Venus Minerals
Asgard Metals Fund
AUSTRALIA
Perth
Regional Office
Economy Class Flights
Strategy & Business Model
The Company’s primary strategy is to achieve sustainable long-term growth via robust and
cost-efficient mineral exploration and development.
This approach has led Ariana to identify, advance and develop projects rapidly, with a discovery cost
per ounce of gold which is less than half that of its peers.
The Company plans to achieve its goals by:
• Focusing on the discovery of sizeable mineral systems
• Building positive long-term relationships with key stakeholders, including local communities
and governments
• Maintaining a strong team with excellent technical, financial and commercial skills
• Forming robust business partnerships for the development of gold and other mineral projects
• Executing selective, high-impact exploration programmes and joint venture (‘JV’) opportunities
• Ensuring safe operating procedures and minimising environmental impact
Project Investment Strategy
Operational Cash-flow
Zenit Madencilik, Turkey (23.5%)
Regional Exploration Partnerships
Venus Minerals, Cyprus (50%)
Western Tethyan Resources,
Eastern Europe (75%)
E
LU
A
G V
SIN
A
E
R
C
IN
D
E
C
R
E
A
S
I
N
G
R
I
S
K
Project Generation Division
Utilising in-house specialists in remote-sensing,
geophysics and geochemistry
NUMBER OF OPPORTUNITIES
Previously Tigris
Resources Ltd
Previously Dakota Minerals
Ltd, since acquired by
Perseus Mining Ltd
Project Catalytic Investments
Discovery Funding
SUCCESSFUL PAST
INVESTMENTS
STRATEGIC
EXPLORATION
PARTNERS
4
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021
Industry Leading
Performance Metrics
Ariana has strived to implement
metrics to measure our achievements
against our strategic goals.
O
P
E
R
A
TIO
N
A
L C
A
S
H C
O
S
T
S
Ariana Resources
US$650/oz
(typical rate)
VS
International average
US$1,000/oz
Through the use of innovative technologies
and operating practices we have achieved
the following industry leading metrics:
• Gold discovery cost
• Operational cash costs
• Carbon footprint
C
O
2 P
E
R O
U
N
C
E L
E
V
E
L
Ariana Resources
0.32 CO2 t/oz
VS
International average
0.8 CO2 t/oz
G
O
L
D DIS
C
O
V
E
R
Y C
O
S
T P
E
R O
Z
Ariana Resources
US$11/oz Au
(or US$6.5/oz Au eq)
VS
Industry average
US$62/oz Au
5
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Chairman’s Statement
Looking at our world in 2022 is a daunting
prospect. Collectively we face a perfect storm:
the aftermath of a pandemic, war in Ukraine,
geostrategic realignment, inflation, the challenges
of de-carbonisation and looming shortages of
critical technology metals. However, this world
of escalating risks is also one of burgeoning
opportunities, particularly for explorers and
miners of precious and technology metals.
During 2020 and into 2021, instead of allowing
ourselves to be consumed with pandemic related
crisis management, we undertook a deep-rooted
strategic review of our business. Our aim was to
ensure we built the foundations of a sustainable
business, fit to meet the challenges and grasp the
opportunities of the future. We were also unanimous
that Ariana must play its part in helping shape
a world fit for future generations to inhabit.
The rapid acceleration of global risks since we first
undertook our review has vindicated the vision
of our approach. There are three core elements
in reshaping Ariana’s business: strategic reach
through early-stage catalytic investments right
through to mature development and production
partnerships, geographical diversification across the
Eastern Hemisphere, and commodity diversification
across both precious and technology metals. The
extended reach and range have the benefit of
mitigating risks and increasing opportunities.
Reinforcing our strategy is the backstop of a successful
producing mine at Kiziltepe. This has provided US$177
million of revenue to our investee company, Zenit
Madencilik, to the end of 2021 and has exceeded
production guidance for the fifth year running (since
inception of operations in 2017). Profitable operations
and strong cash flow capabilities are necessary in the
long-term to sustain our business, and will enable us
to grow and maintain an ongoing dividend stream.
Now that we have received a positive Environmental
Impact Assessment for our gold project at Tavsan
in western Turkey, we are progressing this project
to develop our second gold mine, targeting a
production rate of circa 30,000 ounces of gold per
annum. At the Salinbaş project in eastern Turkey
we have already established a resource of 1.5Moz
gold. This has been the focus of an extensive
drilling programme, which is still underway, to
develop our understanding of this major resource
within the multi-million ounce Artvin goldfield.
6
Berkin Ugurlu, Group Exploration Manager, reviewing
drill-core with the team at the Kiziltepe Mine, Turkey.
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 The Ariana team outside the new Ankara Head Office, Turkey.
Ariana a lean and agile company, well used to operating
with tight financial constraints and low management
overheads. A perfect illustration of the benefits of our
lean approach is that Ariana has one of the lowest
gold discovery costs in the business - a fifth of the
industry average. We are confident that a strategy
of broadening our opportunities, while mitigating
our risks and leveraging our strengths will ensure
we continue to build a resilient and agile company.
Whilst conducting our strategic review, we recognised
that at the heart of Ariana’s ability to survive and thrive
is the quality of our team. From Ariana’s inception,
we understood the need to build and develop a
diverse, distributed and multi-skilled team. We also
recognised the need to work together cohesively,
despite the challenges of field conditions and remote
locations. As in many instances of Ariana’s history,
hardships drove adaptation. Thus, long before the
company had to face the challenges of the recent
pandemic, we had harnessed technology to enable
collaborative team working, even from the remotest
locations. Indeed, the capabilities we built into
the company enabled us to operate successfully
without disruption throughout the past two years.
In line with our broader strategy, we have also
successfully enhanced our asset base through
our 50% earn in to Venus Minerals Ltd and the
associated JV development of the fully permitted
Apliki copper gold mine in Cyprus. In south-eastern
Europe, we hold a 75% stake in Western Tethyan
Resources Ltd, which is developing licences in
Kosovo and using the newly acquired Newmont
database to target significant opportunities in the
wider region. In Australia, our Asgard Metals Fund
has made investments in Australia-focused Panther
Metals and Kazakhstan-focused Pallas Resources, in
addition to Indochina-focused Annamite Resources
post-period end. This strategy of leveraging our
exploration knowledge and skills underpins our ability
to differentiate solid opportunities from the myriad
that we review. Our ability to generate a range of
prospective targets across a wider geography also
has the benefit of allowing us to have an ‘evergreen’
approach to exploration throughout the year.
We have also focused on ensuring Ariana’s core
strengths remain the bedrock of our strategy.
Developing a successful exploration and mining
company over the past 20 years meant we had to learn
to turn adversity into an advantage. This has made
7
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Chairman’s Statement continued
Outcrops of highly silicified rocks within the pillow basalt
units exposed at the Ayia Marina exploration target, Cyprus.
Our recent collaboration with Newmont (post-period
end) brings into sharp focus our objective to hunt for
world-class mineral deposits, as Newmont is itself
specifically focused on Tier One Assets. Newmont
has undertaken not only to collaborate with Ariana
in exploration across south-eastern Europe but
has also invested US$2.5 million in Ariana. I would
like to take this opportunity to thank Newmont for
this statement of confidence and encouragement.
Newmont’s investment in Ariana also demonstrates
their alignment with our view that it is within the
under-explored Tethyan Metallogenic Belt that
the next Tier One Assets will be discovered.
It is worth reflecting on Newmont’s achievements
over their 100 years’ existence and where they came
from. As a fledgling mining company, Newmont made
its first major gold investment with a 25% founding
stake in Anglo American Corporation in South Africa.
This is a good example of how a part investment
stake can lead to great things. Newmont has since
gone on to become the largest gold producer in
the world, as well as owning a host of other mineral
producing mines globally. We have a long history
of working with the Newmont team and have had
access to their regional database in Turkey for some
time. We view it as a powerful endorsement that
they have chosen us to be their eyes and boots
on the ground in south-eastern Europe. Their own
stable of Tier One assets shows us what they will
be looking for in this new theatre of operations and
I have no doubt we will not disappoint them.
Furthermore, the Ariana team has grown significantly
over the last year and I would like to extend a warm
welcome to all the new members and acknowledge
how fortunate we are to have you on board. We are
proud of our ability to attract and retain great people,
as well as our ability to form alliances with academia
and established mining experts across many countries.
It is this diversity of skills, talents and experience
which is constantly enriching Ariana’s working
environment. We also recognise the importance of
giving our teams freedom to experiment without
fear of failure. We depend on their innovations and
their boldness. We find that younger team members
often teach and reinvigorate older ones. In doing
so they refresh the DNA of the organisation.
In the context of such skills sharing and collaboration,
we are especially pleased to open our new Ankara
head office as a regional hub for our geoscientific skills
and analytical capabilities. We know that the active
collaboration of great people can achieve extraordinary
things. A textbook example of the power of
collaborative teamwork was the famous ‘Skunk Works’,
developed by Lockheed Martin under the brilliant and
legendary leadership of Kelly Johnson. Using an agile
approach to teamwork, where teams were given great
autonomy, unhindered by bureaucracy, Lockheed
achieved seemingly impossible timescales in the
development of new aerospace technologies. There
are consequently three cornerstones underpinning
Ariana’s strategy: targeting, technology and
teamwork, and these drive everything that we do.
8
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 at varying stages of maturity to extend the reach and
range of our business across new geographies and
commodities. This new reach and range encompasses
south-eastern Europe copper/gold, Cyprus copper,
Central Asian copper/gold and Australian gold/
nickel-cobalt. We are also poised to leap further into
uncharted territory in the Tethyan Metallogenic Belt
with our newly conceived Project Leopard in Eastern
Turkey. The mighty Anatolian Leopard may be an
elusive creature but we intend to unleash not only
two decades of exploration expertise but also the
youthful eyes and energy of our team on this vast
under-explored territory. Empowered by the robust
finances of our Kiziltepe mine, a clear strategy and a
proven team, we look out from the crow’s nest over
the horizons of the next years with confidence.
As I look back at my nearly two decades of investment
with Ariana there are many highlights that I can
reflect on. I think the ones that stand out amongst
the many include the AIM listing of a fledgling
exploration company with a prospective gold asset,
and seeing that asset being developed into a core
profitable producing gold mine following its first gold
pour. The latter, without doubt, takes the top slot
of all my highlights, followed by the receipt of our
first ever dividend cheque in the post, which itself
is probably one of the most rewarding things any
exploration investor can experience. As I look forward
to the next decade, with such a wide distribution
of capable team members, from Australia as far as
Turkey and Zimbabwe, and having the tools and
resources available, we are better placed than we
have ever been to make a major gold discovery.
As a team, we look forward to welcoming our
shareholders at our next Annual General Meeting
where we will follow the formal business by
updating you with a presentation on our current
developments. The notice of AGM includes all the
resolutions proposed including the proposed dividend
payment. I would like to encourage shareholders
to exercise your proxy votes in favour of these
resolutions even if you are planning to attend the
AGM. I would also like to round off by thanking our
team and stakeholders and in particular those new
partnership members who have demonstrated
their confidence in the Ariana success story.
Michael de Villiers
Chairman
Having boots on the ground in prospective geological
territory is all well and good but one must also be
mindful of the broader picture. As the renowned
geologist Terry Grammar was noted for saying, you
have to look at all aspects of a project. This includes the
business model, legal title, operating environment and
financing. In summary, you must have sharp situational
awareness. It is only then that you can achieve a
successful mineral discovery. With this in mind, we
have gone to great lengths to ensure we are well
informed on all aspects of our prospective investments,
not only for the projects we undertake directly but
also for our target investment companies, where we
maintain an ongoing dialog. This background work
behind a sound business strategy is so often unseen
and unsung and yet it is a vital cornerstone of success.
Ariana would not have a successful operational gold
mine today were it not for the patient hours and
indeed years of quiet diplomacy with communities,
business partners and government organisations.
A critical part of our approach relates to shared
values, built both within and outside the company,
linking our teams and our partners. There is a shared
moral compass at the heart of this approach, with
our emphasis on trying to take the responsible
course of action, even if this is often not the easiest
route. A diligent approach to environmental, social
and governance responsibilities is as relevant
to the external actions of a company as it is in
the internal arrangements of a company.
As we continue to seek our core strategic metals
- gold, silver and copper - we remain confident of
their long-term value. We are also confident that
their prices will continue to trend upwards, despite
the odd dip following a recent rise in interest rates.
In the context of geostrategic realignment, it is
interesting to note that the Pentagon has recently
asked Congress to extend funding to mineral projects
in other jurisdictions, namely the UK and Australia.
This demonstrates that our exploration strategy is
well positioned and that there are great opportunities
for agile explorers and developers like Ariana.
Despite an exceptionally challenging world
environment, after our first 20 years we stride into
Ariana’s future confident we have reshaped our
business to meet the challenges and grasp the
opportunities of the future. Ariana has three inherent
advantages that we will draw on to drive the next 20
years: our clear strategic direction, the intelligence
and agility of our youthful team and the passion for
exploration and mining that guides our endeavours.
Ariana has also demonstrated it is adroit at forging
strong relationships with able business partners to
further our strategy. We now have a pipeline of projects
9
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Operations Review
2021 marked one of the most significant periods
in the history of the Company. Corporate activity
witnessed a major restructuring of our interests in
Turkey and a significant broadening of our scope
as an exploration and development enterprise
across multiple jurisdictions in south-eastern
Europe and via our investment in Venus Minerals
Ltd (“Venus”) in particular. Following the completion
of our transaction with Ozaltin Holding A.S. and
Proccea Construction Co., the interests of the
Company in Turkey are held through a 23.5%
shareholding in Zenit Madencilik San. ve Tic. A.S.
(“Zenit”). Accordingly, by early 2021, the Company
had achieved a significant liquidity milestone which
enabled the Company to declare and pay the first
installment of its Special Dividend, amounting to
0.7p per share in total. Meanwhile, the limitations
on travel caused by the ongoing pandemic
restrictions implemented worldwide were turned
to the advantage of the Company, through the
development of its revised strategy, particularly
in the context of the Asgard Metals Fund.
Now for the fifth year running, operations in western
Turkey continue to exceed gold production guidance,
primarily as a result of the successful and timely
completion of a processing plant expansion at the
Kiziltepe Mine during the year. The processing plant
is currently performing in line with expectations
at a nominal base-rate of 400,000 tonnes ore
per annum. In addition, the Company further
increased the resource base of Zenit and Venus
to c.2.2Moz of gold (with additional copper, silver
and zinc), following further updates to our JORC
Resource Estimate and Exploration Targets.
The Company continued to advance its interests
in a portfolio of Cypriot copper-gold projects via its
50% holding in Venus. During the year, the JORC
Resource for its Magellan Project was significantly
enhanced, following the completion of a resource
and exploration drilling programme, which had
commenced in March 2021. In addition, a joint venture
agreement was agreed in principle (and formally
completed post-period end) between Venus and
the Iacovou Group concerning the development of
the fully-permitted Apliki Mine, which contains a
Mineral Resource of 11Mt @ 0.25-0.69% copper.
the Company
increased its global
resource base
substantially to c.
2.2Moz of gold
1 0
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 ZENIT
23.5% Ariana
VENUS
50% Ariana
KIZILTEPE
2.15M m³
TAVSAN
2.20M m³
SALINBAS
3.20M m³
ARDALA
30M m³
MAGELLAN
3.50M m³
US$177m
-
-
-
-
PRODUCTION
REVENUE
GOLD
OUNCES
222,000
253,000
598,000
939,000
48,500 - 257,000*
COPPER
TONNES
0
0
0
110,000
61,400
NOTE: Areal footprint of each deposit area shown in plan view and at the same scale. The volume in cubic metres of each deposit area
is also provided. The contained gold in ounces and copper in tonnes (derived from JORC statements) is shown as circles with area
proportionate to the metal content. The Magellan Project gold content is based on the JORC Exploration Target. Current as at end 2021.
Elsewhere, the Company initiated work on its interests
in south-eastern Europe through its investee company,
Western Tethyan Resources Limited (“WTR”) which
is held 75% by Ariana. This south-eastern European
focused company is managed by a high-profile board
with extensive operational experience across this
region. Licences located in eastern Kosovo form the
basis of the company’s project interests at this time,
though other projects are being evaluated across
the region. WTR is also pursuing a target generation
exercise utilising a range of geoscientific datasets
including those derived from Newmont Corporation
following their strategic investment in Ariana, post-
period end.
1 1
The Company was also proud to launch a not-for-
profit initiative, which aims to support education and
sustainability projects benefitting the communities in
which the Company operates. The Company and its
partners in Turkey have a successful track-record of
supporting local community and environmental causes
and it intends to build upon these in the years ahead.
Separately the Company is continuing to support a
20-year Masters degree scholarship in Mining Geology,
the Richard Osman Scholarship Programme, at the
Camborne School of Mines.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Operations Review continued
Zenit Madencilik
Zenit Madencilik San. ve Tic. A.S. is a three-
way partnership operating in Turkey, owned
23.5% by Ariana. Zenit is operated by Proccea
Construction Co., which also owns 23.5%,
with the remaining 53% owned by Ozaltin
Holding A.S. Zenit owns 100% of the Kiziltepe
gold-silver mine, and the Tavşan and Salinbaş
development projects, in addition to a number
of other gold projects in Turkey. Additional
exploration and resource drilling undertaken
during the year further enhanced the
Resource and Reserve base of the Company.
Zenit is focused on achieving production from
multiple sites in the coming years, with the
aim of increasing output to at least c. 50,000
ounces of gold per annum. Ariana typically
receives dividend payments from Zenit
on an annual basis, the amount received
being dependent on annual operational
requirements and expectations.
Kiziltepe Mine Processing Plant, following plant expansion in 2021.
Zenit Production Profile
NEW JV COMMENCES
ARIANA AT 23.5%
MILL EXPANSION
COMPLETED
z
o
d
o
G
l
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2017
2018
2019
2020 2021
2022
2023 2024 2025 2026
2027
2028 2029 2030
TOTAL
Kiziltepe
Tavsan
Salinbas
Ariana Proportionate Share
Historical and projected production from Zenit, showing the production from individual mines and their annual total until 2030. Subject to
feasibility and environmental permitting, production from Tavşan is expected to conclude in 2030 while production from Salinbaş is expected to
extend beyond 2030.
1 2
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021
Kiziltepe
The Kiziltepe Gold-Silver Mine is located in western
Turkey and contains a JORC (2012) Measured, Indicated
and Inferred Resource of 222,000 ounces gold and 3.8
million ounces silver (as at February 2021, depleted).
The mine has been in profitable production since early
2017 and is expected to produce at a rate of c.20,000
ounces of gold per annum to at least the mid-2020s.
Since start-up, the mine has recorded five years of
successful operations and has provided US$177 million
in revenue as at the end of 2021. Processing at Kiziltepe
is via the carbon-in-leach method and a processing
plant expansion completed in 2021 has allowed for
higher mill throughput to a nominal steady-state rate
of 400,000 tonnes of ore per annum. A major drilling
programme of over 15,000m was completed from
H2 2021 which targeted various resource extensions
across the property, following which a revised Mineral
Resource and Reserve Estimate was established. A Net
Smelter Return (“NSR”) royalty of 2.5% on production is
being paid to Franco-Nevada Corporation.
Zenit Revenue 2017-2021
Structural training within the Arzu South
open pit, Kiziltepe Mine, Turkey.
Cumulative
Revenue
2017-2021
$177M
Total ore mined
2017-2021
1,436,339t
Avg. processed
grade Au
2017-2021
3.4 g/t
$45.1M
$37.8M
$37.5M
$42.9M
l
z
o
d
o
G
/
r
e
v
l
i
S
500,000
400,000
300,000
200,000
$14M
100,000
0
2017
2018
2019
2020
2021
Revenue US$
Proportion of Ag oz
Proportion of Au oz
NOTE: Total ore mined includes materials stockpiled and not yet processed as at end 2021.
1 3
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT
Operations Review continued
Tavşan
The Tavşan Gold Project is located in
western Turkey and contains a JORC (2012)
Measured, Indicated and Inferred Resource
of 253,000 ounces gold and 0.7 million
ounces silver (as at June 2020). The project
received a positive Environmental Impact
Assessment during 2021 and is currently
completing permitting with the intention of
developing the site to become the second
gold mining operation of Zenit. Processing
at Tavşan will be via the heap-leach
method to accommodate a production rate
of c. 30,000 ounces of gold per annum. It is
expected that the mine life will exceed six
years and a recent 3,900m resource drilling
programme was completed post-period
end, which will lead to a revised Mineral
Resource Estimate. A NSR royalty of up
to 2% on future production is payable to
Sandstorm Gold.
Exploration team reviewing drill pads
at the Tavsan Project, Turkey.
Part of a 9m intercept of 1.75g/t Au in recent drilling at Tavsan. Peak grade 2.43g/t Au at
50-51m. Photo shows a highly brecciated and mineralised jasperoid at a major thrust
faulted contact between Jurassic micritic limestones and Late Cretaceous ophiolitic rocks.
1 4
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Drone survey at the Salinbaş Project,
using a DJI Phantom 3 Advanced.
Salinbaş
The Salinbaş Gold Project is located in
north-eastern Turkey and contains a JORC
(2012) 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 Salinbaş.
An Exploration Target of up to 2.7Moz gold
and 16.1Moz silver was established for the
project in 2018. There is potential for further
resource extensions to be delineated within
high-grade and steeply dipping breccia
pipes (akin to the Hot Maden deposit),
which likely merge with the Salinbaş gold-
silver zone. Furthermore, recent work has
confirmed that the Ardala Zone is dominated
by a significantly gold-enriched copper-
molybdenum porphyry system. A drilling
programme commenced in this area during
late 2021, which is ongoing. A NSR royalty of
up to 2% on future production is payable to
Eldorado Gold Corporation.
1 5
Salinbaş discovery outcrop. Boulder of outcropping
ore carrying a grade of 5.35g/t Au + 102g/t Ag.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Operations Review continued
Venus Minerals Ltd (“Venus”) is a UK registered,
Cyprus-domiciled company holding a significant
exploration and development portfolio in Cyprus.
Ariana completed its earn-in to 50% of Venus during
2021, following expenditure of €3 million. An advanced
copper-gold-zinc project, Magellan, contains an
Indicated and Inferred JORC Resource of c. 17Mt @
0.48% copper and 0.21 g/t gold (excluding additional
silver and zinc), providing the company with an
exceptional foundation on which to build its resource
base. Scoping and pit-optimisation studies for the
projects have been completed and are under review
towards the preparation of a combined Preliminary
Economic Assessment. Venus also holds a substantial
exploration portfolio outside of the main project areas.
This contains several immediate drill targets, which
have been established following a rigorous data review
and new surface exploration. Following the completion,
post-period end, of the 50:50 Apliki Joint Venture with
the Iacovou Group, Venus intends to list on AIM and to
develop a significant new mining operation in Cyprus.
The Apliki mine development project is fully-permitted
and comprises an Indicated and Inferred JORC
Resource of 11Mt @ 0.25-0.69% copper and a recently
decommissioned solvent extraction electrowinning
plant ready for installation at the Apliki site.
www.venusminerals.co
Western Tethyan Resources Ltd is a UK registered
company holding several exploration licences and
applications in Kosovo through its wholly-owned
subsidiary Kosovo Mineral Resources LLC. The
company is currently 75% owned by Ariana with the
remaining 25% owned by a highly qualified board.
The company is currently focused on exploration for
major copper-gold deposits in the Lecce Magmatic
Complex and Vardar Belt. The company is assessing
several other exploration project opportunities across
south-eastern Europe, targeting major copper-gold
deposits across the porphyry-epithermal transition.
Funding for these efforts is being provided via a
US$2.5 million Strategic Investment Agreement by
Newmont Corporation, which became a significant
shareholder of Ariana in the process. Countries in
which project opportunities are being assessed
include Bosnia and Herzegovina, Bulgaria, Greece,
Kosovo, North Macedonia and Serbia. It is the
intention of the company to progress to drill testing
its projects within the shortest possible timeframe.
www.westerntethyanresources.com
1 6
Channel sampling on the periphery of the
Kokkinoyia deposit. Testing for gold potential at
surface in areas previously unsampled, Cyprus.
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Asgard Metals Pty. Ltd. is a wholly-owned
Australian subsidiary of Ariana, now operating as
the Asgard Metals Fund (“Asgard”). The company
was established initially to focus on technology-
commodity opportunities globally, and was
successful in identifying several early-stage
lithium exploration projects in Western Australia
and the Northern Territory. These projects were
vended to two ASX-listed companies in 2015
and 2016 for a combination of cash and shares,
which established the financial basis of its
future business. The remit of Asgard has been
broadened to encompass “Project Catalytic”
investments in selected companies with interests
in high-quality early-stage exploration project
opportunities. Such investments are being made
within listed companies and in private companies
which are demonstrating the capacity and desire
to list on the ASX or LSE stock exchanges in
particular. Asgard is specifically focused on the
discovery stage of mineral exploration projects,
where the full capabilities of the Ariana in-house
exploration team can be applied. Investments
by Asgard during the year included those
into Panther Metals Ltd (ASX: PNT) and Pallas
Resources Ltd.
1 7
Mentor Demi, Managing Director of Western Tethyan
Resources inspecting mineralised outcrops in Kosovo.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT without the environmental and social impacts of the
past. This presents several fundamental challenges
and an opportunity for agile companies capable of
advancing their exploration strategies in new search
spaces. We have spent the past year positioning the
Company accordingly.
This year also represents 20 years since the
foundation of the original Ariana Resources in
Australia and we are consequently very proud of
what has been achieved by our team during the past
decades. There is a strong sense among us of the
Company now having come full-circle, particularly
given my own relocation to Perth during 2020. This is
especially relevant given the significance of Perth to
the global mining and exploration industry in terms of
the development of world-leading exploration models,
techniques and operational practices, in addition to its
particularly dynamic and vibrant deal-making scene.
Accordingly, the Company is very well positioned for
the future and we look forward to continuing to action
our unique strategy.
Dr Kerim Sener
Managing Director
Operations Review continued
Outlook
As predicted in our outlook of last year, 2021 marked
the dawn of a new age for Ariana Resources. During
2020, we set up the Company in a strategically
powerful position and then acted systematically in
line with this strategy throughout the past year. This
is exemplified by the culmination, post-period end,
of a strategic investment by Newmont Corporation
into our business, with the intention of developing the
exploration opportunities we had created through the
establishment of Western Tethyan Resources last year.
In addition to advancing our long-term interests in
south-eastern Europe, the Company also commenced
investing in high-impact early-stage exploration
opportunities via the Asgard Metals Fund. By year end,
the Company was invested in gold and nickel-cobalt
exploration in Western Australia and the Northern
Territory, and in gold-copper exploration in Kazakhstan.
Post-period end, these were joined by an investment
in gold-copper exploration in Laos. As part of this
investment strategy, we are actively engaged with
our investee companies and provide regular input into
their exploration programmes, while their teams in turn
provide in-country experience and leverage.
Such activities corresponded with a significant
increase in news-flow, which will be sustained in the
years ahead given the wider geographic spread of
projects in which we are now invested. These projects
are in part selected across various climatic zones
to maximise the potential for seasonal exploration
activity, resulting in a more even spread of work
throughout the year for our project evaluation team
and enabling steady emphasis to be sustained year-
round across our investee projects. This further builds
on our already notable operational efficiencies as a
business, particularly in this new world of reduced
travel and remote-working; further advantages of this
approach are the marked benefits to our corporate
ESG commitments.
The Company presently has the capability and
financial resources to hold a structurally more
diverse portfolio of mineral exploration, development
and mining project investments across a broader
geography. With the significantly increased demand
in commodities, particularly those which contribute
to technological development, we find ourselves on
the brink of profound changes in perception and
awareness of the industry and a consequent marked
realignment of investment portfolios globally. Not only
will the mining sector need to find and mine more at
an accelerating rate but it will also need to do this
1 8
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Growth in Market Capitalisation and Resource Base
8M 1
2.5M 2
2022
2020
2017
~£50M
TOTAL RESOURCE
2.88 Moz Au Eq.
(As at end 2021)
49.6M
Kiziltepe Producing
£15.3M
TOTAL RESOURCE
1.62 Moz Au Eq.
25M 8M
8.4M
2013
£7.5M
TOTAL RESOURCE
1.03 Moz Au Eq.
2009
2007
£5.6M
TOTAL RESOURCE
0.40 Moz Au Eq.
£3.7M
TOTAL RESOURCE
0.14 Moz Au Eq.
2005
IPO
Funding
Market Funds (US$M)
Proccea JV Input (US$M)
Eldorado JV Input (US$M)
Kiziltepe Bank Finance (US$M)
Özaltin Holding (US$M)
Newmont (US$M)
1 Özaltin Holding contribution to Salinbaş
Project expenditure continuing.
2 Represents Newmont's initial contribution.
TOTAL FUNDING - US$101.5M
Ariana has minimised
shareholder risk by seeking
the majority of its funding
requirements through
partners and bank finance
US$25
million
US$26.9
million
US$49.6
million
Market Funding
Partner Funding
Bank Finance
1 9
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Resource Tables
Resource Estimate for Kiziltepe Sector:
Kiziltepe, Kepez, Kizilcukur, Ivrindi
Measured
Indicated
Measured & Indicated
Inferred
Global Total
Tonnes
(t)
730,600
786,070
1,516,670
1,424,550
2,941,220
Grade Au
(g/t)
Grade Ag
(g/t)
Gold
(oz)
Silver
(oz)
2.97
2.36
2.66
2.02
2.35
51.09
48.65
49.83
30.67
69,830
1,200,050
59,650
1,229,620
129,480
2,429,670
92,340
1,404,710
40.55
221,820
3,834,380
Summary Kiziltepe (2022), Kepez (2021), Kizilcukur (2020) and Ivrindi (2013) JORC 2012 compliant Mineral Resource Estimates (depleted for mining
to November 2021). Reporting is based on a 0.75, 1.0 and 1.25 g/t Au cut-off grade across the different domains. Figures in the table may not sum
precisely due to rounding. Ariana’s share of resources is 23.5% through its holding in Zenit Madencilik.
Resource Estimate for Tavşan:
Tavşan
Measured
Indicated
Measured & Indicated
Inferred
Global Total
Tonnes
(t)
611,000
2,556,000
3,167,000
1,322,000
4,489,000
Grade Au
(g/t)
Grade Ag
(g/t)
Gold
(oz)
Silver
(oz)
2.77
1.70
1.91
1.39
1.75
4.84
5.19
5.12
4.72
5.01
54,000
95,000
140,000
427,000
194,000
522,000
59,000
201,000
253,000
723,000
Summary Tavsan Project JORC 2012 compliant Mineral Resource Estimate. Reporting is based on a 0.7 g/t Au cut-off grade. Resource estimate
dated June 2020. Figures in the table may not sum precisely due to rounding. Ariana’s share of resources is 23.5% through its holding in Zenit
Madencilik.
2 0
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Resource Estimate for Salinbaş / Ardala:
Salinbaş
Measured
Indicated
Measured & Indicated
Inferred
Global Total
Tonnes
(t)
868,000
2,421,000
3,289,000
5,114,000
8,403,000
Grade Au
(g/t)
Grade Ag
(g/t)
Gold
(oz)
Silver
(oz)
2.32
1.83
1.96
2.38
2.21
15.30
19.00
18.02
16.10
16.90
65,000
428,000
142,000
1,478,000
207,000
1,906,000
391,000
2,649,000
598,000
4,555,000
Ardala
Tonnes
(t)
Grade Au
(g/t)
Grade Ag
(g/t)
Grade Cu
(ppm)
Grade Mo
(ppm)
Gold
(oz)
Silver
(oz)
Copper
(t)
Molybdenum
(t)
Inferred
66,423,000
0.44
1.57
1,656
65
939,000 3,359,000
110,000
4,300
Summary Salinbaş Project JORC 2012 compliant Mineral Resource Estimate dated 29 July 2020. Reporting is based on a 0.5 g/t Au cut-off grade
for the Salinbaş mineralisation and 0.25 g/t Au for the Ardala mineralisation. Figures in the table may not sum precisely due to rounding. Separate
resource domains have been established for the Au, Cu and Mo components of the Ardala porphyry. It is considered reasonable to estimate these
domains in this manner because the resource is classified as Inferred in this location and mining parameters have not yet been established.
There is a 95% coincidence of the Au and Cu domains, and a 40-50% coincidence of the Au and Mo domains. Ariana’s share of resources is 23.5%
through its holding in Zenit Madencilik.
Resource Estimate for Magellan:
Classification
Measured
Indicated
Measured &
Indicated
Tonnes
(t)
Grade
Cu
(%)
Grade
Au
(g/t)
Grade
Zn
(%)
Grade
Cu eq
(%)
Copper
(t)
Gold
(oz)
Zinc
(t)
Copper
eq
(t)
-
-
-
-
-
-
-
-
-
4,140,900
0.39
0.27
0.00
0.59
16,300
35,900
0
24,400
4,140,900
0.39
0.27
0.00
0.59
16,300
35,900
0
24,400
Inferred
12,501,100
0.51
Global Total
16,642,000
0.48
0.19
0.21
0.21
0.16
0.72
64,300
76,800
26,800
90,000
0.69
80,600
112,700
26,800
114,400
Summary 2020-21 Magellan Project (Kokkinoyia, Klirou and New Sha) JORC 2012 compliant Mineral Resource Estimate. Reporting is based on
a 0.2-1% Cu and 0.2g/t Au cut-off grade across all the projects. Figures in the table may not sum precisely due to rounding. Ariana’s share of
resources is 50% through its holding in Venus Minerals.
2 1
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Financial Review
Profits before tax increased to £7.7m up from £5.1m in
the previous year. The principal driver of this was the
partial disposal of our interests in Turkey in February
2021 as we reduced our 50% interest in the Kiziltepe
mine and 100% interest in the Salinbaş project to a
collective 23.5% interest in both, for net proceeds of
£27m giving rise to profit of £6.4m, as set out in note
5 to the accounts. Administrative costs increased by
£1.5m due in part to increased staff costs of £0.4m
on account of less being capitalised within intangible
exploration assets this year, and in part due to
increased costs associated with management of our
interests in Zenit by Proccea of £1.1m following our
reduced involvement in the mine itself. These latter
costs are expected to run until Q1 2023.
Otherwise our profits are primarily determined by the
performance of our interests in our investments in our
associated undertakings, being our 23.5% ownership in
our aforementioned Turkish interests, and our interest
in our Cypriot copper gold projects though our 50%
interest in Venus, showing an aggregated net share of
profit this year of £4m.
Other points of note are the increased tax charge
arising in part due to the tax arising on the partial
disposal of our interests and also withholding tax
on dividends subsequently returned to the UK. The
Turkish Lira declined significantly against Sterling
towards the end of the year which has given rise to a
translation loss on the revaluation of our foreign entity
opening balances of £2.9m, recorded through other
comprehensive income as usual.
As far as the Group Statement of Financial Position is
concerned, our interest in Zenit is now treated as an
associate rather than joint venture investment, albeit
the equity method of accounting for it remains the
same, but now our interests in Salinbaş via Pontid and
Cyprus via Venus are also accounted for as associates
using the equity method of accounting too, reporting a
combined value at the year end of £11.4m.
Another significant change this year arose from our
capital reduction in July 2021 when we applied via the
Courts to cancel our historical deferred ordinary shares
and share premium and set them against retained
losses to create a distributable capital reduction reserve
of £7.2m, thereby facilitating the payment of the first
tranche of our Special Dividend of £3.8m from the
proceeds of our reduction of our Turkish interests. Since
the year end another tranche of £1.8m has been paid,
with another such dividend planned for October 2022.
At the year end the Directors were pleased to report a
healthy cash balance of £16.4m, and we will continue
to strive to deliver value from this position, with a view
to further dividends in future.
Dr Kerim Sener
Managing Director
Alteration zone at Hizarliyayla prospect, Salinbaş Project, Turkey.
2 2
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Organisation Review
ARIANA EXPLORATION
& DEVELOPMENT LTD
INVESTMENTS
100% Ariana
ASGARD METALS
PTY LTD
PORTSWOOD
RESOURCES LTD
WESTERN TETHYAN
RESOURCES LTD
VENUS MINERALS LTD
100% Ariana
100% Ariana
75% Ariana
50% Ariana
GALATA MINERAL
MADENCILIK SAN VE TIC AS
100% Ariana
ZENİT MADENCILIK SAN
VE TIC AS
23.5% Ariana
TAVŞAN PROJECT
KIZILTEPE MINE
PRODUCING ASSET
SALINBAŞ PROJECT
Simplified organisational structure which excludes Greater Pontides Exploration BV (100%) and
Pontid Madencilik San. ve Tic. A.S. (23.5%).
2 3
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT
Michael de Villiers B. Comm. Professional Accountant (SA) MIOD
Chairman and Company Secretary
Michael qualified as a Professional Accountant with Ernst & Young in
Cape Town. He gained his experience as Financial Manager at mining and
chemicals operations in Botswana, Bulgaria, FSU, Ghana, Namibia and the
United Kingdom. He was previously CFO of Eurasia Mining plc, Finance
Director of Mercator Gold (now ECR Minerals plc), Oxus Gold plc and Navan
Mining plc. He has over 30 years’ experience in the mining industry.
Michael is Chairman of the Audit Committee and
serves on the Sustainability Committee.
Kerim Sener BSc (Hons) MSc DIC PhD
Managing Director
Kerim graduated from the University of Southampton with a first-class
BSc (Hons) degree in Geology in 1997 and from the Royal School of
Mines, Imperial College, with an MSc in Mineral Exploration in 1998. After
working in gold exploration and mining in Zimbabwe, he completed
a PhD at the University of Western Australia in 2004, during which
time he also founded Ariana Resources. Since then he has been
responsible for the discovery of over 4.3Moz of gold in eastern Europe,
primarily for Ariana. Kerim is also Non-Executive Chairman of ASX-
listed Panther Metals Limited and an Adjunct Research Associate at
the Centre for Exploration Targeting, University of Western Australia.
Kerim is a Fellow of The Geological Society of London,
Member of The Institute of Materials, Minerals and Mining,
Member of the Chamber of Geological Engineers in Turkey
and a member of the Society of Economic Geologists.
Directors
2 4
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021
William Payne BA (Hons) ACA
Non-Executive Director and Chief Financial Officer
William studied Accountancy at Exeter University before
training and qualifying as a Chartered Accountant with KPMG in
London. In 2003, he became a partner in top 20 accountancy
practice Wilkins Kennedy LLP at their London office, which is
now part of Azets where he is currently Regional CEO.
William is Chairman of the Remuneration Committee
and serves on the Audit Committee.
Chris Sangster BSc (Hons), ARSM, GDE, FIMMM
Non-Executive Director
Chris is a mining engineer with over 40 years’ experience in the mining
industry. He has a BSc Hons in Mining Engineering from the Royal School
of Mines, Imperial College in London and a GDE in Mineral Economics from
the University of Witwatersrand and is a Fellow of the Institute of Materials
Minerals and Mining. Chris has extensive experience in gold, diamond and
base metal production environments. He held positions of Vice President
Mining Services at KCM Plc and Principal Mining Engineer for Australian
Mining Consultants. He co-founded ASX / AIM listed Scotgold Resources
and was its Managing Director following which he became a Non-
Executive Director and Technical Consultant from late 2014 until recently.
Chris is Chairman of the Sustainability Committee
and serves on the Remuneration Committee.
2 5
Aerial view of the Kiziltepe Mine Site.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Operational Team
Fatma Yildiz BSc (Hons)
General Manager
Mathew Cooper BSc (Hons)
Senior Geophysics Advisor
Fatma is a Turkish national and has over 10 years
of experience in the mining sector in Turkey. She
graduated from Çukurova University in 2007 with
a BSc degree in Mining Engineering. In addition to
being our General Manager, she is also responsible
for managing the administrative and legal
requirements of our exploration/operational licenses,
applications and formal reporting for licenses.
Fatma is a member of the Chamber of
Mining Engineers of Turkey, holder of a
technical inspector certificate and an
occupational health and safety certificate.
Berkin Uğurlu BSc (Hons)
Exploration Manager
Berkin graduated from the Middle East Technical
University with a BSc degree in Geology in 2004.
He worked with Teck in Turkey for four years before
spending a further four years as a Senior Consultant.
Following this he was appointed as Country Manager
for Tigris-Eurasia Madencilik, originally a subsidiary of
Royal Road Minerals, where he worked for four years.
He has experience managing all aspects of mineral
exploration programmes from project generation
through to resource and reserve drilling and technical
reporting including to 43-101 and JORC standards.
He is a member of the Society of Economic
Geologists, a board member of the Mining
Geologists Association and a member of the
Chamber of Geological Engineers in Turkey. He
holds a IHA0 drone pilot qualification in Turkey.
Zack van Coller BSc (Hons)
Special Projects Geologist
Zack graduated from Cardiff University with a BSc (Hons)
degree in Exploration and Resource Geology in 2010. As
leader of our Special Projects Team, he is responsible
for advancing our project pipeline, in addition to being
involved in various exploration programmes across
Turkey. He was involved in the development of the
highly successful lithium strategy pursued by Asgard
Metals Pty. Ltd. on behalf of Ariana. He has also been
involved in advanced project development of a high-
sulphidation Cu-Au deposit in the Republic of North
Macedonia. Zack is bilingual in English and Afrikaans.
Zack is a member of the Geological Society of
London and he operates primarily between the UK
and Turkey.
2 6
Mathew has over 20 years’ experience working as
a geophysicist for airborne and ground acquisition
contractors and mining and exploration companies,
including Normandy Exploration, with the last 13 years
as a consultant, manager and director largely with
Core Geophysics. He has been involved in a number
of exploration successes whilst working on a range of
projects, both within Australia and internationally. He has
worked on a large variety of commodities including gold,
iron ore, base metals, diamonds, uranium and oil and
gas plays. Mathew is based in Perth, Western Australia.
Mathew is a member of the Australian Society
of Exploration Geophysicists, Society of
Geophysicists, and the Australian Institute of
Geoscientists.
Ruth Bektaş BSc (Hons)
Project Analyst
Ruth graduated from the University of Leicester with
a BSc (Hons) degree in Applied and Environmental
Geology in 2013. As Project Analyst, through
geological, resource and financial modelling she is
responsible for identifying new projects to add to
our portfolio. Ruth worked with Ariana and Zenit
from 2013 to 2018 and was involved in bringing the
Kiziltepe Project from exploration to production stage.
She has also been with Tetra Tech as a Resource
Geologist, working on a range of projects around
the world, reporting in line with NI 43-101 and JORC
standards. Ruth is bilingual in English and Turkish.
Ruth is a Chartered Geologist of the
Geological Society of London (CGeol) and
the European Federation of Geologists
(EurGeol). She is also a member of the Society
of Economic Geologists and YERMAM.
Selim Senoz BSc (Hons)
Geological Database Manager
Selim graduated in 2001 with a BSc in Geological
Engineering from Dokuz Eylül University in Izmir.
He is responsible for updating our information
systems databases, managing our geographic
information systems and drilling data. He is
the Company’s designated QA/QC officer and
has worked with the company since 2006.
He is a member of the Chamber of Geological
Engineers of Turkey.
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Elif Ünal BSC (Hons) MSc
Remote-sensing Specialist
Mikail Mert Gümüş BSC (Hons)
Geochemist
Elif has over 10 years of experience in the mining sector
in Turkey, having graduated from Hacettepe University
in 2003 with a BSc (Hons) in Geological Engineering and
from Anadolu University in 2007 with MSc in Remote
Sensing & Geographical Information Systems (GIS).
She initially worked with INTA Space Turk Company
in 2007 on satellite image processing before joining
Galata Madencilik in 2008. From the end of 2008 to
2019 she worked as a data manager and deputy general
manager of Pontid Madencilik before transferring
back to Galata as Project Manager responsible
for the administrative and data management
requirements of our Salinbaş Project prior to it
becoming part of the Zenit JV. She also provides
specialist skills in remote-sensing to the Company.
She is a member of the Chamber of
Geological Engineers of Turkey and has a
safe driving certificate. She holds a IHA0
drone pilot qualification in Turkey.
Muammer Çelik BSC (Hons) MSc
Geophysicist
Muammer graduated from Cumhuriyet University
with a BSc degree in Geophysical Engineering in 2015
and from Kocaeli University with a MSc Degree in
Geophysical Engineering in 2018 and also Dumlupınar
University with a MSc in Occupational Health & Safety
in 2020. Previously he worked as a Geophysical
Engineer at Fimar Mermer, ore deposits exploration with
Geophysical Magnetic Prospection Data Observation,
Collecting, Processing and Structural Imaging. Other
qualifications include certificates in Geosoft Oasis
Montaj, Sch.-WinGLink Shell and MapInfo Professional.
He is a member of the Society of Exploration
Geophysicists (SEG), a member of the Advancing
Earth and Space Science (AGU) and a member of
the Chamber of Geophysical Engineers in Turkey.
Mert graduated from Ankara University with double
majors in Geological Engineering and Chemistry. He
is applying geochemical techniques to our mining
and mineral exploration projects. He is assisting in the
design of geochemical sampling campaigns, and the
collection, management, interpretation and modelling
of geochemical data. He has used x-ray diffractometers
and x-ray fluorescence devices and prepared chemical
analysis reports. Mert is interested in petrography-
mineralogy and relevant laboratory usage techniques.
Sinem Koç BSC (Hons)
Geoscientist
Sinem graduated from Middle East Technical
University in 2019 from the Department of Geological
Engineering BSc (Hons) and from Anadolu University
in Geographical Information Systems BSc. She
worked with Esan Eczacıbaşı Holding in Balya
Lead and Zinc Mine for two years as an Exploration
Geologist. She is a member of a Chamber of Geological
Engineers and Mining Geologists Association.
Mehluli Tshuma Dip.Geol. Cert.Mining
GIS Analyst
Mehluli graduated in 2004 with a Diploma in Geology
from the Zimbabwe School of Mines. He also holds a
certificate in Technical and Operational Surface Mining
from University of Pretoria. He has experience in mineral
exploration and mining in southern Africa. He has
worked for companies such as Reunion Mining PLC,
Lonmin PLC, Metallon Gold and Zimbabwe Platinum
Mines. In Mozambique he worked for Rovuma Resources
Limitada managing the geographic information systems
across all projects and was part of an exploration team
that led to the graphite discovery in Cabo Delgado
province in northern Mozambique. Most recently, he has
worked with Canister Resources in Zimbabwe, where he
was responsible for geological database management,
taking their gold project to a full feasibility study.
2 7
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Field Team
Burak Mert BSc (Hons)
Project Geologist
Burak graduated from Aksaray University with a BSc
(Hons) degree in Geological Engineering in 2008 and
from İstanbul Rumeli University in 2018 with MSc in
Occupational Health & Safety. Previously he worked
as a field geologist at 3S Holding, including Pb-Zn
deposits and RCR Holding including Cu deposits across
Turkey. He is currently working in various exploration
programmes and is responsible for all aspects of
mineral exploration programmes in western Turkey. He
is a member of the Society of Economic Geologists,
a member of the Mining Geologists Association and
a member of the Chamber of Geological Engineers in
Turkey. He is holder of a technical inspector certificate
and an IHA0 drone pilot qualification in Turkey.
Furkan Oğuz BSc (Hons)
Exploration Geologist
Furkan graduated from Middle East Technical University
with a BSc (Hons) degree in Geological Engineering
in Ankara and completed an BSc degree at Anadolu
University on Geographical Information Systems
(GIS) and currently studying for a MSc degree on
Structural Geology at Middle East Technical University
in Turkey. He is a member of the Society of Economic
Geologists, the Mining Geologists Association and
the Chamber of Geological Engineers in Turkey.
Tuncay Yavuz BSc (Hons)
Senior Technician
Tuncay graduated from the Anadolu University
with a BA (Hons) degree in International Relations.
Tuncay worked for seven years with Newmont in
Turkey as senior field technician prior to joining Ariana
Resources in 2010. He has worked extensively on
gold projects in western, eastern and north-eastern
Turkey and is fully trained in field first aid, advanced
off-road driving and health and safety (to Australian
standards). Other qualifications include certificates
in first-aid, ArcGIS and MapInfo Professional. He
holds an IHA0 drone pilot qualification in Turkey.
Ismail Aksoy
Field Technician
İsmail has over 10 years of experience in the mining
sector in Turkey. He is experienced with magnetic
surveys and field sampling throughout western, central,
and north-eastern Turkey. From 2011 to present he has
worked with the company as a field technician in central
and north-eastern Turkey, mainly in Balıkesir Province.
Our full team can be viewed at arianaresources.com
2 8
Field and Operational team at Kiziltepe.
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Key Performance Indicators
Highly fractured outcrops of mineralised jasperoids
with quartz veining and minor stibiconite.
Financial KPIs
Production Success
Enhancing profits through efficient mining operations and
successful conversion of Resources to Reserves.
Exploration Expenditure
Enhancing intangible exploration assets through targeted expenditure.
Cash Flow Forecasts
Regular cash flow monitoring to ensure exploration targets
are met and that working capital is maintained.
Operational KPIs
Operational Success
Increasing JORC compliant resources and progressing advanced
projects through development and into production.
Advance Portfolio
Through acquisition or discovery of new exploration properties
utilising on-going exploration to target new ground.
Environmental, Health & Safety
Ensuring that all efforts are made to minimise adverse
personal, corporate and environmental outcomes, through
best practice training, implementation and monitoring.
2 9
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Risks & Uncertainties
PRODUCTION RISK
DESCRIPTION
Mining activity involves a variety of potential risks
to production or interruptions to output. These can
include geological, mining, processing, environmental
and financial risks.
MITIGATION
Zenit reviews mining progress on a regular
basis to determine any potential
risk factors that could affect
production negatively. Zenit
employs experienced
management staff.
EXPLORATION AND
DEVELOPMENT RISK
DESCRIPTION
Inherent risks associated with the failure to
discover or develop an economically recoverable
ore reserve, to conclude a definitive feasibility
study, and to obtain the necessary consents and
approvals for the conduct of exploration and mining.
MITIGATION
The Board is committed to reviewing progress
relating to the development of its various exploration
targets and assesses this against planned
expenditure and expected outcomes. The Group
employs highly trained geologists with extensive
knowledge of mineral exploration, with a particular
expertise in precious metal mineralisation.
3 0
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 POLITICAL / IN-COUNTRY RISK
DESCRIPTION
Political instabilities, which could cause the loss of an asset
through expropriation, war or unrest. Exploration or mining
licences applied for might not be granted or renewed.
MITIGATION
The Group has spread its political risk exposure by developing
active interests in several countries, including Australia,
Cyprus, Kosovo and Turkey. As the location of our mining
projects, Turkey benefits from a robust political
environment and has established fiscal and mining
codes. The Group enjoys a good working
relationship with the relevant authorities
in Turkey and has a permanent
management team in the country
to monitor developments.
ENVIRONMENTAL /
SAFETY RISK
DESCRIPTION
Major pollution arising from operations and/or
loss of life due to systems or equipment failure.
MITIGATION
The Group adopts best practice in the industry
with on-site, country level and corporate level
policies and procedures.
3 1
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Risks & Uncertainties continued
COMMODITY RISK
DESCRIPTION
A potential fall in commodity prices which
could lead to it becoming uneconomic
for the Group to mine its assets.
MITIGATION
The Group’s principal interest is gold and silver
and the outlook for gold remains broadly
positive as a continuing safe haven
vehicle for wealth protection. The
Group will consider the use
of appropriate hedging
products to mitigate
this risk.
FOREIGN CURRENCY
RISK
DESCRIPTION
The Group’s results are sensitive to foreign
currency movements and in particular with its
exposure to the Turkish Lira, arising from the Group’s
mining operations being in Turkey.
MITIGATION
The group finances its operations through the cash flow
generated from its share of profits from our investment
in our gold mining company. On receipt of funds by the
Group in Turkey in Lira, surpluses after local operating
costs are then generally transferred by way of dividend
to the UK as Pounds Sterling. The Group maintains the
majority of its cash in Pounds Sterling and United States
Dollars and continues to monitor relevant currency
movements and considers action where appropriate.
3 2
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 FINANCING RISK
DESCRIPTION
This is the risk of running out of working and investment capital.
The Group has recently completed its partial divestment
of its interest in Turkey in exchange for cash.
Consequently there is limited finance risk.
MITIGATION
In addition, the Group continues to receive cash
flow from its joint venture investment in an
operational gold mine. The Group may
also issue new share capital, and
may include bank borrowing,
where appropriate, to
finance its activities.
COVID-19
RISK
DESCRIPTION
The recent escalation in the spread
of COVID-19 worldwide poses a threat
to the continuation of mining operations if a
widespread infection were to occur at the Kiziltepe
Mine. Government guidance on the pandemic in our
operating countries, particularly in the UK and Turkey,
is being kept under review. Risk mitigation procedures were
implemented rapidly and well-ahead of government guidance,
to ensure safe working practices were maintained for our staff.
Staff have been supportive of these new methods of working and
have adapted quickly to them. Despite a significant weighting
towards remote-working within the business, there has been
no measurable detrimental impact to business activity.
MITIGATION
3 3
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Section 172(1) Statement - Promotion of the Company
for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit
of its members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term;
• Act fairly between the members of the Company;
• Maintain a reputation for high standards of business conduct;
• Consider the interests of the Company’s employees;
• Foster the Company’s relationships with suppliers, customers and others; and
• Consider the impact of the Company’s operations on the community and the environment.
The application of the s172 requirements can be demonstrated in relation to some of the key decisions made
during 2021:
• Continuing evaluation of existing license areas and assessment of projects;
• Undertaking various technical studies as part of the operating licence process;
• Identifying and refining both new and previously defined drill targets;
• Further identification of drill targets across projects whether held within asociates, joint ventures or not;
• Completion of diamond and Reverse Circulation drill programmes at various projects;
• Commencement of resource estimation for the projects in accordance with JORC reporting standards; and
• Continued assessment of corporate overheads, expenditure levels and wider market conditions.
As a mining exploration and development group operating primarily in Europe, the Board takes seriously its ethical
responsibilities to the communities and environment in which it works. We abide by the local and relevant UK laws
on anti-corruption and bribery. Wherever possible, local communities are engaged in the geological operations and
support functions required for field operations, providing much needed employment and wider economic benefits
to the local communities. In addition, we follow international best practice on environmental aspects of our work.
Our goal is to meet or exceed standards, in order to ensure we maintain our social licence to operate from the
communities with which we interact. The interests of our employees are a primary consideration for the Board.
Personal development opportunities are supported and a health and security support network are in place to assist
with any issues that may arise on field expeditions.
3 4
STRATEGIC REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 3 5
Veins of selenite/gypsum exposed within the highly altered
lower pillow lava sequence within Kokkinoyia, Cyprus.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021STRATEGIC REPORT Corporate Governance
The Ariana Board of Directors aims to conform
to statutory responsibilities and industry good
practice in relation to corporate governance
of Ariana and its subsidiaries. The Board has
adopted the latest version of the QCA Corporate
Governance Code (2018) (“QCA Code”) and strives
to follow the 10 principles outlined within it to the
fullest extent possible taking into consideration
the stage of development of the Company.
Details of how the Company addresses the key
governance principles defined in the QCA code are
set out below, and are found in more detail on the
Company’s website in accordance with AIM Rule 26.
1. Business model and strategy
The Board has developed and implemented a strategy
and business model which it believes will achieve
long term value for shareholders. This strategy
and business model is clearly explained in the
strategic report and on the Company’s website. The
Company believes that this strategy and business
model is appropriate to protect the Company from
unnecessary risk and secure its long-term future.
2. Understanding shareholder
needs and expectations
The Board is committed to maintaining good
communications and seeks to understand and meet
shareholder needs and expectations by engaging with
them across a range of formal platforms. This includes
regular interaction through investor presentations,
Q&A forums, investor relations services, an investor
portal available on the website, and social media sites
as well as its Annual General Meeting. The Company
provides phone numbers on all its updates and RNS
announcements where shareholders can contact
the appropriate senior Company representatives or
advisors directly with their queries together with a
dedicated email address for shareholder feedback.
3. Considering wider stakeholder
and social responsibilities
The Board recognises that the long-term success
of the Company is reliant upon the efforts of
the employees of the Company and its partners,
contractors, suppliers, regulators and other
stakeholders. The Board has put in place a range
of processes and systems to ensure that there is
close oversight and contact with its key resources
and relationships. For example, all employees of
the Company participate in a structured Company-
wide annual assessment process which is designed
3 6
to ensure that there is an open and confidential
dialogue with each person in the Company to help
ensure successful two-way communication with
agreement on goals, targets and aspirations of
the employee and the Company. These feedback
processes help to ensure that the Company can
respond to new issues and opportunities that arise to
further the success of employees and the Company.
The Company’s principal areas of operation (project
locations) are in Turkey and the surrounding regions.
The Company is committed to cultivating and
maintaining good relations with all stakeholders and its
strategy and business model are designed to minimise
any potential negative impact of its activities and of
those working on its behalf, on the communities where
it operates and on the environment. The Company
has established a positive working relationship
with governments, non-government organisations
and local communities with whom it holds regular
meetings to apprise them of the Company’s plans.
The Company firmly believes that the mining and
exploration development projects that form the
basis of its business model will substantially benefit
the countries and regions in which it operates. The
Company provides open and clear communication
channels and points of contact for all its stakeholders
and has a robust communication system in place
to ensure all concerns are quickly brought to the
Board and senior management’s attention.
4. Risk management
In addition to its other roles and responsibilities,
the Audit Committee is responsible to the Board for
ensuring that procedures are in place and are being
implemented effectively to identify, evaluate and
manage the risks faced by the Company. The Company
recognises that it is exposed to risks which may
negatively impact on its business operations. It takes all
reasonable steps to identify, assess the impact of and
mitigate these risks wherever possible. These risks are
clearly identified on page 30-33 of the Strategic Report.
The following risk assessment matrix sets out
those risks, and identifies their ownership and the
controls that are in place. This matrix is updated
as changes arise in the nature of risks or the
controls that are implemented to mitigate them.
The Audit Committee reviews the risk matrix
and the effectiveness of scenario testing on a
regular basis. The following principal risks and
controls to mitigate them, have been identified:
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Activity
Risk
Impact
Control(s)
Operation
Injury to staff
Injury to staff whilst operating heavy
machinery in remote locations
Regulatory
adherence
Breach of rules
Censure or withdrawal of authorisation
Creating a safe working
environment through strict
procedures and regular training
Strong compliance regime instilled
at all levels of the Company
Strategic
Market downturn
Change in macro-economic conditions Ongoing monitoring of economic
events and markets
Failure to deliver
commercially
Inability to operate efficiently
and economically
Active operational monitoring and
experienced management
Financial
Misappropriation
of funds
Fraudulent activity and loss of funds
IT security
Loss of critical financial data
Robust financial controls and
segregation of duties
Regular back up of data online
and locally
The Directors have established procedures, as
represented by this statement, for the purpose of
providing a system of internal control. An internal
audit function is not considered necessary or practical
due to the size of the Company and the close day
to day control exercised by the Executive Director.
However, the Board will continue to monitor the
need for an internal audit function. The Board works
closely with and has regular ongoing dialogue with
the outsourced finance function and has established
appropriate reporting and control mechanisms to
ensure the effectiveness of its control systems.
The outbreak of the recent global COVID-19 virus has
resulted in increased risks within the global economy. The
extent of the effect of the virus, including its long-term
impact, remains uncertain and the Company continues to
monitor the situation while adopting the recommended
precautions to ensure the safety of employees.
5. A well-functioning Board of Directors
The Board comprises a Chairman, Michael de Villiers,
a Managing Director, Dr Kerim Sener and two non-
executive directors, William Payne and Chris Sangster.
Chris Sangster is considered by the Board to be an
independent director, having been appointed in 2016
and since having acted in a primary technical capacity.
In accordance with the Articles of Association of
the Company, one third of the Board is required to
retire each year at the Company’s AGM but directors
resigning can put their name forward for re-election.
The executive director dedicates 100% of his
contractually required time to the Group. The non-
executive directors dedicate as much time as is
required for them to fully carry out their duties for the
3 7
Group, including overseeing corporate governance
arrangements and serving on board committees
with the ultimate responsibility for the quality of,
and approach to, corporate governance lying with
the Chairman. Michael de Villiers also serves as
the Company Secretary and William Payne acts as
the Chief Financial Officer. It is recognised that an
additional independent non-executive director will
benefit the Company and it will appoint such an
independent director at the appropriate time so as
to comply with the Code. It is also recognised that
whilst the finance function is currently carried out by
a Non-Executive Director and his supporting team in
the UK, given not only William Payne’s accountancy
experience but also that of Michael de Villiers, it
is effective and well suited to the Company.
The Board is responsible for formulating, reviewing and
approving the Group’s strategy, budgets, major items of
capital expenditure and acquisitions. An agenda and all
supporting documentation is circulated to the directors
before each Board meeting. Open and timely access
to all information is provided to directors to enable
them to bring independent judgement on issues
affecting the Group and facilitate them in discharging
their duties. The Board met regularly during the last
financial year to 31 December 2021. Generally, no
individual director is absent for more than one board
meeting during any given year. The Board has three
sub-committees: the Audit Committee, Remuneration
Committee and Sustainability Committee. Governance
and Nominations are dealt with by the entire Board.
The Company shall report annually on the number of
Board and committee meetings held during the year
and the attendance record of individual Directors.
In order to be efficient, the Directors meet formally
and informally both in person and by telephone.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE Corporate Governance continued
5. A well-functioning Board
of Directors continued
Details of the Directors’ attendance at formal
quarterly board meetings are set out below:
Meetings
Attended
Meetings eligible
to attend
Kerim Sener
Michael de Villiers
William Payne
Chris Sangster
4
4
4
4
4
4
4
4
The Board is accountable to the shareholders for
delivery of sustained value growth. In order to
support its duties and responsibilities the Board
implements control procedures that assess and
manage risk and ensure robust financial and
operational management within the Group.
The Board sets the Group’s strategy and monitors
its implementation through operational and financial
performance reviews. It also works to ensure that
adequate resources are available to implement strategy
and exploit opportunities in an appropriate manner.
6. Appropriate skills and
experience of the Directors
The Board members have a diverse range of skills
and experience spanning technical, financial and
operational areas relevant to the development and
management of the Company. Summary biographies
of each Board member are shown on pages 24-25.
Directors keep their skill sets up to date by attendance
at, and participation in, various events organised by
their respective industry sectors and by participation
in continuing professional development courses. As
the Company evolves, the Board will be reviewed
and expanded if necessary to ensure appropriate
expertise is always in place to support its business
activities. The Board recognises that it currently has
limited diversity and this will form a part of any future
recruitment consideration if the Board concludes that
replacement or additional directors are required.
Where necessary the Board has engaged external
professional consultants on an ongoing basis to
ensure the Company is meeting its strategies. The
key advisers to the Company are set out on page 1.
The Board engages external geologists, environmental
specialists and a number of other specialized
3 8
consultants to produce the required surveys and
reports for the Environmental Impact Assessment,
Social Impact Assessment and Pre-Feasibility
Study. The key advisers to the Group were 76.
The Board have ensured that the all external advisers
are knowledgeable and provide the required skillset.
7. Evaluation of board performance
The performance of the executive management of
the Company is evaluated on an on-going basis by
the Remuneration Committee (“Remcom”) which is
composed of William Payne and Chris Sangster. The
results of these evaluations are reflected in changes
in the executive remuneration levels recommended
by the Remcom from time to time and in awards
under the Company’s Share Option and Management
Incentive Schemes where it considers such awards
are warranted. As the Company grows, the Board will
develop more comprehensive human resource policies
to provide both internal and external performance
evaluations of its Board, senior management and staff
including the provision for upskilling where necessary
and to provide for Board member succession
planning. The Board considers that the corporate
governance policies it has currently in place for Board
performance reviews is commensurate with the size
and development stage of the Company and well
within the norms of the peer group and industry.
8. Corporate culture
The Company operates across several countries
including the UK, Turkey, Holland, BVI, Kosovo, Cyprus
and Australia.
In line with its international reach, the Company
recognises the cultural diversity both internally and
among its business partners, service providers and
other stakeholders. The Board recognises that their
decisions regarding strategy and risk will impact the
corporate culture of the Company as a whole and
that this will impact the performance of the Company.
The Board is very aware that the tone and culture set
by the Board will impact all aspects of the Company
as a whole and the way that employees behave. The
corporate governance arrangements that the Board
has adopted are designed to ensure that the Company
delivers long-term value to its shareholders and that
shareholders have the opportunity to express their
views and expectations for the Company in a manner
that encourages open dialogue with the Board. A large
part of the Company’s activities is centred upon what
needs to be an open and respectful dialogue with
employees, partners and other stakeholders. Therefore,
the importance of sound ethical values and behaviours
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 is crucial to the ability of the Company to achieve
its corporate objectives successfully. The Board
places great importance on this aspect of corporate
life and seeks to ensure that this flows through all
that the Company does. The directors consider
that at present the Company has an open culture
facilitating comprehensive dialogue and feedback
and enabling positive and constructive challenge.
The Company has adopted, with effect from the
date on which its shares were admitted to AIM,
a code for directors’ and employees’ dealings in
securities which is appropriate for a company
whose securities are traded on AIM and is in
accordance with the requirements of the Market
Abuse Regulation which came into effect in 2016.
9. Maintenance of governance
structures and processes
Ultimate authority for all aspects of the Company’s
activities rests with the Board, the respective
responsibilities of the Chairman and Managing
Director arising as a consequence of delegation
by the Board. The Board has adopted appropriate
delegations of authority which set out matters
which are reserved to the Board. The Chairman
is responsible for the effectiveness of the Board,
while management of the Company’s business
and primary contact with shareholders has been
delegated by the Board to the Managing Director.
Audit Committee
Michael de Villiers and William Payne
This committee has primary responsibility for
monitoring the quality of internal controls and ensuring
that the financial performance of the Company is
properly measured and reported. It receives reports
from the executive management and auditors
relating to the interim and annual accounts and
the accounting and internal control systems in use
throughout the Company. The Audit Committee shall
meet not less than twice in each financial year and it
has unrestricted access to the Company’s auditors.
Remuneration Committee
William Payne and Chris Sangster
The Remuneration Committee reviews the performance
of the executive directors and employees and makes
recommendations to the Board on matters relating
to their remuneration and terms of employment.
The Remuneration Committee also considers and
approves the granting of share options pursuant to
the share option plan and the award of shares in lieu
of bonuses pursuant to the Company’s Remuneration
Policy. The Remuneration Committee reviews
3 9
overall remuneration against industry peer group
companies on a regular basis and takes professional
advice as and when it is deemed necessary.
Sustainability Committee
Chris Sangster and Michael de Villiers
The Sustainability Committee is formed of the
two directors who have prior operational and
industry experience and may include other
management who are responsible for developing
and implementing policy and procedures.
The Company is committed to providing all employees
a safe place to work in accordance with our HSE goals.
This will be accomplished by providing safe equipment
to operate, proper training and safe methods and
procedures. The Company will at a minimum, comply
with all applicable industry norms for rules and
regulations. The Company takes the approach that
no job is so important that it cannot be accomplished
without injury. The Sustainability Committee also
deals with the CSR policy outlined below.
Nominations Committee
The Board has agreed that appointments to the
Board will be made by the Board as a whole and
so has not created a Nominations Committee.
Directors Fiduciary Duties
In accordance with the Companies Act 2006, the
Board complies with: a duty to act within their powers;
a duty to promote the success of the Company; a
duty to exercise independent judgement; a duty to
exercise reasonable care, skill and diligence; a duty
to avoid conflicts of interest; a duty not to accept
benefits from third-parties and a duty to declare any
interest in a proposed transaction or arrangement.
10. Shareholder communications
The Board is committed to good and regular
communications with the market and constructive
dialogue with shareholders. For regulatory purposes,
this is strictly managed by our public relations advisors.
Similarly, institutional shareholders and analysts have
the opportunity to discuss issues and provide feedback
to the Company. All shareholders are encouraged
to attend the Company’s Annual General Meeting.
Investors have access to current information on the
Company though our website, www.arianaresources.
com, and via other designated investor platforms.
Management is available to answer investor enquiries
through formal Q&A sessions arranged periodically
through the year. The Company proposed in 2018
to make greater use of on-line meetings.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE Corporate Responsibility
Ariana has always been committed to socially
responsible and environmentally conscious exploration
and mining. Since the commencement of work on
our Kiziltepe gold mine, Ariana has worked to build
strong links with local communities and to establish
relationships of trust with all stakeholders. Whilst
work on establishing vital stakeholder links often
occurs in the background, its importance cannot
be under-estimated. Without these concerted
efforts and commitment to integrity, we could
not have achieved the sound relationships with
government organisations, local communities and
JV partners, which have underpinned Ariana’s
success. In addition, the Company has in place
an Anti-Corruption and Anti-Bribery Policy.
Shareholders
The Board of Directors encourages communications
with shareholders via formal Q&A sessions
and seeks to protect shareholders’ interests
at all times. More information can be found
in the Corporate Governance section.
Employees
Ariana has always attached great importance to
employees’ professional development and the creation
of employment in the localities where we operate. The
Company provides fair remuneration, flexible working
arrangements where practical and exposure to wider
aspects of the Company’s operations. The Company
gives full and fair consideration to applications for
employment received irrespective of age, gender,
colour, ethnicity, disability, nationality, religious beliefs
or sexual orientation. More information on Ariana’s
Employee policy can be found on its corporate website.
cultures enables us to develop strong connections
with local businesses and communities. We encourage
collaborative working and aim to ensure Ariana’s
values are reflected in our joint ventures and other
partnerships.
In Turkey, Zenit Madencilik, employs local people,
including professionally qualified mining engineers
from nearby villages and towns.
Ariana has run many training programmes for these
employees focusing on the mechanical, physical,
technical and safety aspects of its exploration
programmes. Working with the local community to
promote educational standards is also a priority for
Ariana. Through our joint venture we actively support
Sindirgi Elementary School.
We have also supported many community programmes
in the Sindirgi area close to our Kiziltepe mine.
Recently, we have built a new road to the village in our
Salinbaş Project area.
Suppliers & Contractors
The Company has a prompt payment policy and
seeks to ensure that all liabilities are settled within the
supplier’s terms. Through fair dealings the Company
aims to cultivate the goodwill of its contractors,
consultants and suppliers.
Human Rights
Ariana is committed to best-practice in socially and
ethically responsible exploration and mining for the
benefit of all stakeholders. The activities of the Company
are in line with applicable laws on human rights.
Governmental organisations
Health and Safety
Ariana has many years’ experience across Eastern
Europe and has an in-depth understanding of
business within this broad region. The company
focuses on building good relationships with
government organisations and local authorities. We
have developed a track record of being diligent in
following government guidelines in all aspects of
our work. Ariana works with partners local to each
project, such as Ozaltin Holding A.S. and Proccea
Construction Co. in Turkey and Western Tethyan
Resources in Kosovo, ensuring that financial benefits
also accrue to the countries in which we work.
Local Communities
Ariana has a strong track record of commitment to
working with local suppliers and employing local
people. Our understanding of local social and business
4 0
Company activities are carried out in accordance
with its Health and Safety Policy, which adheres to all
applicable laws. Relevant to their job roles, members
of the team have received certification in occupational
health and safety, advanced off-road driving, first-aid
and survival.
In the face of the COVID-19 pandemic, the Company,
working with Zenit Madencilik and our employees,
has met the challenges of implementing COVID-safe
working practices to ensure work at the Kiziltepe Mine
continued without interruption. We are grateful for
the good sense and forbearance of our employees
and suppliers in helping us manage an extremely
challenging situation over the past two years.
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Environmental
From our inception, Ariana has been committed to a
sustainable and environmentally responsible approach
to exploration and mining. Using cutting edge
technologies and innovative working practices, we aim
to achieve our environmental goals in faster and better
ways.
We have implemented operating guidelines to ensure
that specific environmental standards are met by our
exploration and mining teams. Our operations comply
with local environmental standards and we operate
under the relevant certification from government
departments.
We have adopted agile new technologies and working
practices to help us reduce our carbon footprint. Our
early adoption of portable XRF technology greatly
reduces our carbon footprint, as samples can be
analysed locally, instead of sending them to distant
locations for analysis. Our deployment of Geotek
BoxScan technology for drill cores also ensures
we can analyse cores locally and avoid excessive
transportation. For many years, we have used remote
working team technologies and video-conferencing to
minimise air and road travel.
4 1
Measuring our environmental impact is an essential
component of our approach. Ariana’s carbon emissions
are estimated to be 0.32 tonnes CO2 per ounce of
gold. The global average for our industry is 0.80
tonnes CO2 per ounce of gold. We are proud that our
carbon footprint is being offset by our reforestation
programme of some 8,000 trees and 17,500 other
plants around the Kiziltepe mine site. Rehabilitation
work has begun on parts of the waste rock dump,
covering it with topsoil and planting sainfoin, a drought
resistant plant, highly beneficial to bees and other
pollinators. The topsoil storage area has also been
covered in sainfoin to preserve soil quality, as it is a
nitrogen fixing plant.
We keep bees at the Kiziltepe mine site, as they are a
bellwether for the health of ecosystems. Honey from
our hives is distributed free to local villages. Chickens
and doves are also bred on the site. The local university
prepares a flora and fauna report which we use to
ensure mining activity is not adversely impacting the
local ecosystem.
The joint venture also sponsors firefighting equipment.
Firefighting is a very important local issue, as much of
the upland area in the vicinity of the mine is covered in
protected pine forests.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE Report of the Directors
For the year ended 31 December 2021
The Directors present their report with the audited financial statements of the Company and the Group for the year
ended 31 December 2021.
Principal activity
Ariana Resources PLC (the “Company”) is a public limited company incorporated in England and Wales and domiciled
in Great Britain. The address of its registered office and principal place of business is disclosed at the end of this
report. The Company’s shares are listed on the AIM market of the London Stock Exchange plc. The principal activities
of the Company and its subsidiaries (the “Group”) are related to the exploration for and development of gold and
other minerals, with a focus on south-eastern Europe.
Directors
The Directors during the year under review were:
M J de Villiers
A K Sener
W J B Payne
C J S Sangster
The beneficial interests of the Directors holding office either directly or indirectly (including interests held by spouses,
children or associated parties) on 31 December 2021 in the ordinary issued share capital and options of the Company
were as follows:
M J de Villiers
A K Sener
W J B Payne
C J S Sangster
Total
2021
Ordinary Shares
2021
Share Options
2020
Ordinary Shares
2020
Share Options
63,000,000
3,000,000
21,113,526
11,359,314
5,927,287
nil
2,000,000
2,000,000
55,799,142
18,985,526
9,359,314
3,716,844
14,000,000
6,000,000
4,000,000
4,000,000
101,400,127
7,000,000
87,860,826
28,000,000
Further details on share options can be found in note 19 to the financial statements.
Annual General Meeting (AGM) COVID-19 and contingencies
Shareholders are welcomed in person to attend our 2022 Annual General Meeting this year, particularly given the
constraints imposed in 2020 and 2021 due to the COVID-19 pandemic. We are proposing to hold the Annual General
Meeting at the East India Club, 16 St James’s Square, London, SW1Y 4LH on 10 August 2022 at 12:00 Noon.
4 2
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Share capital
Section 561 of the Companies Act 2006 provides that
subject to limited exceptions any shares being issued
must be offered to all existing shareholders pro-rata to
their holding. However, where Directors have a general
authority to allot shares they may be given the power
by the Articles or by a special resolution to allot shares
pursuant to the authority as if the statutory pre-emption
rights did not exist.
An ordinary resolution will be proposed at the
forthcoming Annual General Meeting for the renewal
of the Directors’ general authority to issue relevant
securities up to an aggregate nominal amount of
£500,000.
A special resolution will also be proposed at the
forthcoming Annual General Meeting for the
renewal of the Directors’ authority to allot relevant
securities for cash without first offering them to the
shareholders pro-rata to their holdings, pursuant
to section 570 of the Companies Act 2006 up to an
aggregate nominal amount of £250,000.
The authorities mentioned above will, if passed, expire at
the conclusion of the Annual General Meeting or the date
being 15 months from the passing of the resolutions.
Substantial share interests
The Company had been notified of the following
interests in the Company’s shares held on 24
June 2022.
Shareholder
Hargreaves Lansdown
Nominees Limited
Interactive Investor
Services Nominees Limited
Barclays Direct Investing
Nominees Limited
Ordinary
Shares
% of Issued
Share
Capital
215,841,003
18.89
158,309,079
13.85
143,449,104
12.55
Jim Nominees Limited
Mr Michael de Villiers
83,444,631
63,000,000
HSDL Nominees Limited
51,510,774
Lawshare Nominees Limited
50,077,886
Newmont Corporation
Mr Stephen Bingham
46,185,387
45,964,533
Vidacos Nominees Limited
36,892,867
Transact Nominees Limited
34,325,234
7.30
5.51
4.50
4.38
4.04
4.02
3.23
3.00
4 3
Strategic Report
The Company has chosen, in accordance with Section
414C of the Companies Act 2006, to set out the
following information in the Strategic Report which
would otherwise be required to be contained in the
Directors’ Report:
• Financial risk management objectives;
• Indication of exposure to principal risks;
• Corporate Governance including committee
objectives and memberships;
• Future developments of the business.
The Impact of COVID-19 on the Group
Since March 2020, the Board has made preparations to
mitigate the impact of COVID-19 on the business through
several action plans and mitigation strategies. These will
continue to be monitored and updated as required.
Dividends
Following the Company’s special dividend
announcement of 20 July 2021, the Company has
declared and paid an interim special dividend of 0.35
pence per ordinary share on 24 September 2021 and
a further interim dividend of 0.175 pence per ordinary
share paid on 25 March 2022. A final dividend of 0.175
pence per share is proposed for payment on 3 October
2022. This has been proposed as resolution 4 in the
notice of AGM.
Group’s policy on payment of creditors
It is the Group’s normal practice to settle the terms
of payment when agreeing a transaction, to ensure
suppliers are aware of those terms and to abide by
them. Trade creditor days based on creditors at
31 December 2021 were 30 days (2020: 30 days).
Political and charitable contributions
During the year, the Group made a charitable donation of
£3,000 to the University of Exeter towards the Richard
Osman Memorial Fund. The Group has committed to
supporting this charitable fund until 2022.
No contributions were made for political purposes.
Going concern
The Directors confirm that they are satisfied the Group
has adequate resources to continue in business for the
foreseeable future, having regard to the factors set out
in more detail in Note 1 to the financial statements.
Post year end events
Further details on post balance sheet events can be
found in note 24 to the financial statements.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE Report of the Directors
For the year ended 31 December 2021
Statement of Directors’ responsibilities in respect
of the Annual Report and the financial statements
The Companies Act 2006 (“the Act”) requires the
Directors to prepare group and parent company
financial statements for each financial year. Under
the Act the Company has elected to prepare both the
Group and the parent company financial statements in
accordance with UK-adopted International Accounting
Standards.
Under the Act the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and the Group and of their profit or loss for
that period. In preparing each of the Company and
Group financial statements, the Directors are required
to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and estimates that are
reasonable, relevant and reliable;
• state whether applicable UK-adopted International
Accounting Standards have been followed, subject
to any material departures disclosed and explained
in the financial statements;
• assess the Company and Group’s ability to continue
as a going concern, disclosing, as applicable,
matters related to going concern; and
• use the going concern basis of accounting unless
they either intend to liquidate the Company or
Group or to cease operations or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s and the Group’s transactions
and disclose with reasonable accuracy at any time the
financial position of the Company and the Group and
enable them to ensure that its financial statements
comply with the the Act. They are responsible for such
internal control as they determine is necessary to
enable the preparation of financial statements that are
free from material misstatement, whether due to fraud
or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud
and other irregularities.
4 4
The Company is compliant with AIM Rule 26 regarding
the Company’s website.
Under applicable law and regulations, the Directors
are responsible for preparing a Strategic Report and
a Directors’ Report that complies with the law and
those regulations.
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website. Legislation in the
UK governing the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
Disclosure of information to auditor
The Directors who held office at the date of approval
of this Directors’ Report confirm that, so far as they
are each aware, there is no relevant audit information
of which the Company’s auditor is unaware; and each
Director has taken all the steps that he ought to have
taken as a Director to make himself aware of any
relevant audit information and to establish that the
Company’s auditors are aware of that information.
Corporate governance
The Board of Directors
The Directors are responsible for the Group’s system
of internal control and for reviewing its effectiveness.
The risk management process and systems of internal
control are designed to manage rather than eliminate
the risk of failure to achieve the Group’s objectives.
Any such system of internal control can only provide
reasonable but not absolute assurance against
material misstatement or loss.
Full meetings are held quarterly to review Group
strategy, direction and financial performance. The
Directors meet regularly to review operational reports
from all of the Group’s areas of operations. The process
is used to identify major business risks, evaluate their
financial implications, and ensure an appropriate
control environment.
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Remuneration of the Executive Director and other
senior executives comprises basic salary, discretionary
bonuses, participation in the Company’s share option
scheme and other benefits. The Company’s remuneration
policy with regard to options is to maintain an amount of
not more than 10% of the issued share capital in options
for the Company’s management and employees, from
time to time.
Total Directors’ emoluments are disclosed in note 3 to
the financial statements and the Directors’ options are
disclosed above.
Auditor
In accordance with Section 489 of the Act, a resolution for
the re-appointment PKF Littlejohn LLP as auditor of the
Company is to be proposed at the forthcoming Annual
General Meeting as an ordinary resolution at Resolution
5. PKF Littlejohn LLP have expressed their willingness to
continue in office as auditor.
By order of the Board.
Michael de Villiers
Company Secretary
28 June 2022
Certain control over expenditure is delegated to on site
project managers subject to Board control by means of
monthly budgetary reports.
Internal financial control procedures include:
• preparation and regular review of operating
budgets and forecasts;
• prior approval of all capital expenditure;
• review and debate of treasury policy; and
• unrestricted access of Non-Executive Directors
to all members of senior management.
Audit Committee
The Audit Committee comprises Michael de Villiers and
William Payne. The Audit Committee may examine any
matters relating to the financial affairs of the Group and
the Group’s audits.
This includes reviews of the annual financial statements
and announcements, internal control procedures,
accounting procedures, accounting policies, the
appointment, independence, objectivity, terms of
reference and fees of external auditors and such other
related functions as the Board may require.
Remuneration Committee
The committee comprises William Payne and Chris
Sangster. It determines the terms and conditions of the
employment and annual remuneration of the Executive
Director and other senior executives. It consults with
the Executive Director, takes into consideration external
data and comparative third-party remuneration and has
access to professional advice outside the Company.
The key policy objectives of the Remuneration
Committee in respect of the Company’s Executive
Director and other senior executives are:
• to ensure that individuals are fairly rewarded for
their personal contribution to the Company’s overall
performance; and
• to act as the independent committee ensuring that
due regard is given to the interest of the Company’s
shareholders and to the financial and commercial
health of the Company.
4 5
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE
Independent Auditor’s Report
To the members of Ariana Resources PLC
Opinion
We have audited the financial statements of
Ariana Resources Plc (the ‘parent company’) and
its subsidiaries (the ‘group’) for the year ended 31
December 2021 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated
and Parent Company Statements of Financial Position,
the Consolidated and Parent Company Statements
of Changes in Equity, the Consolidated and Parent
Company Statements of Cash Flows and notes to the
financial statements, including significant accounting
policies. The financial reporting framework that has
been applied in their preparation is applicable law and
UK-adopted international accounting standards and
as regards the parent company financial statements,
as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view
of the state of the group’s and of the parent
company’s affairs as at 31 December 2021 and of
the group’s profit for the year then ended;
• the group financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards;
• the parent company financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards and as applied
in accordance with the provisions of the Companies
Act 2006; and
• the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those
standards are further described in the Auditor’s
responsibilities for the audit of the financial statements
section of our report. We are independent of the group
and parent company in accordance with the ethical
requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
4 6
Conclusions relating to going concern
In auditing the financial statements, we have
concluded that the director’s use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation
of the directors’ assessment of the group’s and
parent company’s ability to continue to adopt the
going concern basis of accounting included a review
of the forecast financial information prepared by
management, a review of management’s assessment
of going concern, and identification of post year end
information impacting going concern.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group’s or parent company’s
ability to continue as a going concern for a period
of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the
directors with respect to going concern are described
in the relevant sections of this report.
Our application of materiality
We apply the concept of materiality both in planning
and performing our audit, and in evaluating the effect of
misstatements. The scope of our audit was influenced
by our application of materiality. The quantitative and
qualitative threshold for materiality determine the scope
of our audit and the nature, timing and extent of our
audit procedures. In order to reduce to an appropriately
low level the probability that any misstatements exceed
materiality, we use a lower materiality level, performance
materiality, to determine the extent of testing needed.
Misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating
their effect on the financial statements as a whole.
Materiality
Basis for materiality
Group £577,000
(2020: £449,000)
Company £90,000
(2020: £57,000)
2% of net assets
5% of loss before tax
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 An audit was performed on the financial information of
the group’s significant operating components which,
for the year ended 31 December 2021, were located
in Turkey and the United Kingdom. The accounting
records of the parent company and all subsidiary
undertakings are centrally located and audited by us
based upon materiality or risk. The key audit matters
and how these were addressed are outlined below.
The Turkish registered equity accounted associate
company was audited by a component auditor under
our instruction. The group audit team instructed the
component auditor on the significant risk areas to be
covered and determined component materiality. There
was regular interaction with the component auditor
during all stages of the audit.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed risks
of material misstatement (whether or not due to fraud)
we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in
the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
We consider net assets to be the most significant
determinant of the group’s financial position and
performance used by shareholders, with the key
financial statement balances being the equity
accounted associates. The basis for calculating
materiality was unchanged from the prior year. The
performance materiality for the group was £375,050
(2020: £291,850).
The materiality applied to the parent company financial
statements was based on a threshold of 5% of loss
before tax, in order to obtain coverage of expenditure
in our testing for a non-trading undertaking. The
performance materiality for the parent company was
£58,500 (2020: £39,900).
Whilst materiality for the group financial statements as
a whole was set at £577,000, component materiality
for the joint venture was set at £152,000 based
upon 3% of the average of profit before tax and net
assets. Performance materiality was set at 65%,
based on our assessment of the relevant risk factors,
the level of estimation inherent within the entities
and our substantive testing approach. Component
materiality for the subsidiary undertakings ranged
between £152,000 and £375,050 (2020: £110,900 and
£291,850). We applied the concept of materiality both
in planning and performing our audit, and in evaluating
the effect of misstatements.
We agreed with the audit committee that we would
report all corrected and uncorrected misstatements
identified during the course of our audit in excess of
£28,850 (2020: £22,450) for the group and £4,500
(2020: £2,850) for the parent company, in addition
to other identified misstatements that warranted
reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality
and assessed the risk of material misstatement in
the financial statements. In particular, we looked
at areas requiring the directors to make subjective
judgements, for example in respect of assessing
the recoverability of exploration, evaluation and
development expenditure and the carrying value and
recoverability of investments in subsidiaries at parent
company level, and the consideration of future events
that are inherently uncertain. We also addressed the
risk of management override of internal controls,
including evaluating whether there was evidence of
bias by the directors that represented a risk of material
misstatement due to fraud.
4 7
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE
Independent Auditor’s Report
To the members of Ariana Resources PLC
Key Audit Matter
Equity accounted associate (formerly joint venture)
entity Zenit Madencilik San ve Tic Ltd (“Zenit”)
(refer note 6)
The investment in joint venture has a carrying
value at 31 December 2021 of £4,864,000
(2020: £11,213,000). The group’s share of profit
during the year ended 31 December 2021
amounted to £4,260,000 (2020: £6,478,000).
The accuracy of equity accounting for the joint
venture is directly reliant on the accuracy of the
financial statements of Zenit which contain a
number of key risk areas. In addition, the Group
concluded a restructuring programme during the year
resulting in a part disposal of its interest in Zenit.
How the scope of our audit addressed
the key audit matter
Our work in this area included but
was not restricted to:
• We instructed and monitored the component
auditor and reviewed the component auditor
working papers. Revenue recognition,
recoverability of mining assets, inventory valuation
and compliance with laws and regulations were
among the areas designated as either significant
or identified risks;
• We checked and agreed the GAAP transition
adjustments between the local jurisdiction
financial statements and the group accounting
framework;
• We reviewed the restructuring agreements
and ensured the accounting treatment was in
accordance with the key terms within those
agreements; and
• We checked the associate had been correctly
equity accounted for, including the adequacy of
disclosures, in the financial statements.
4 8
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Other information
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. The
directors are responsible for the other information
contained within the annual report. Our opinion on the
group and parent company financial statements does
not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit,
or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the
work we have performed, we conclude that there is a
material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, based on the work undertaken in the
course of the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
• the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the
group and the parent company and their environment
obtained in the course of the audit, we have not
identified material misstatements in the strategic
report or the directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept
by the parent company, or returns adequate for our
audit have not been received from branches not
visited by us; or
• the parent company financial statements are not
in agreement with the accounting records and
returns; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the
preparation of the group and parent company financial
statements and for being satisfied that they give a
true and fair view, and for such internal control as
the directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the group and parent company financial
statements, the directors are responsible for assessing
the group’s and the parent company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or
to cease operations, or have no realistic alternative but
to do so.
4 9
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE Independent Auditor’s Report
To the members of Ariana Resources PLC
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud is detailed below:
• We obtained an understanding of the group and
parent company and the sector in which they
operate to identify laws and regulations that
could reasonably be expected to have a direct
effect on the financial statements, including the
equity accounted joint venture. We obtained our
understanding in this regard through discussions
with management and application of our cumulative
audit knowledge and experience of the industry.
We ensured that the audit team collectively had the
appropriate experience with auditing entities within
this industry, facing similar audit and business risks,
and of a similar size.
• We determined the principal laws and regulations
relevant to the group and parent company in this
regard to be those arising from:
• We addressed the risk of fraud arising from
management override of controls by performing
audit procedures which included, but were not
limited to: the testing of journals, reviewing
accounting estimates for evidence of bias; and
evaluating the business rationale of any significant
transactions that are unusual or outside the normal
course of business.
Because of the inherent limitations of an audit,
there is a risk that we will not detect all irregularities,
including those leading to a material misstatement
in the financial statements or non-compliance
with regulation. This risk increases the more that
compliance with a law or regulation is removed from
the events and transactions reflected in the financial
statements, as we will be less likely to become aware
of instances of non-compliance. The risk is also greater
regarding irregularities occurring due to fraud rather
than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of
our auditor’s report.
Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state to
them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone, other than
the company and the company’s members as a body,
for our audit work, for this report, or for the opinions we
have formed.
• AIM Rules;
• IFRSs; and
• Local tax laws and regulations.
David Thompson (Senior Statutory Auditor)
for and on behalf of PKF Littlejohn LLP
Statutory Auditor
• We designed our audit procedures to ensure the
audit team considered whether there were any
indications of non-compliance by the group and
parent company with those laws and regulations.
These procedures included, but were not limited to:
• Making enquiries of management;
• A review of Board minutes;
• A review of legal ledger accounts; and
• A review of regulated news
service announcements.
5 0
15 Westferry Circus
Canary Wharf
London
E14 4HD
28 June 2022
GOVERNANCEARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021
Druze quartz from Kizilcukur
5 1
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021GOVERNANCE Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Continuing operations
Administrative costs
General exploration expenditure
Operating loss
Profit on restructuring of group activities
Share of profit of associate accounted for using the equity method
Share of profit of joint venture accounted for using the equity method
Share of loss of associate accounted for using the equity method
Investment income
Profit before tax
Taxation
Profit for the year from continuing operations
Earnings per share (pence) attributable to equity holders of the company
Note
4
5
6
6
8
2021
£’000
(2,917)
(67)
2020
£’000
(1,360)
(35)
(2,984)
(1,395)
6,423
4,260
-
(213)
202
7,688
(3,832)
3,856
-
-
6,478
-
7
5,090
(327)
4,763
Basic and diluted
10
0.36
0.45
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
Other comprehensive loss for the year net of income tax
Total comprehensive profit for the year
The accompanying notes form part of these financial statements.
(2,948)
(2,948)
908
(3,647)
(3,647)
1,116
5 2
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Consolidated Statement of Financial Position
For the year ended 31 December 2021
Assets
Non-current assets
Trade and other receivables
Financial assets at fair value through profit or loss
Intangible assets
Land, property, plant and equipment
Investment in associates accounted for using the equity method
Investment in Joint Venture accounted for using the equity method
Earn-In advances
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Total current assets
Total assets
Equity
Called up share capital
Share premium
Capital reduction reserve
Other reserves
Share based payments
Translation reserve
Retained earnings
Total equity attributable to equity holders of the parent
Non-controlling interest
Total equity
Liabilities
Current liabilities
Trade and other payables
Liabilities directly associated with classified as held for resale
Total current liabilities
Total equity and liabilities
Note
2021
£’000
2020
£’000
15
13
11
12
6
6
6
16
18
19
19
19
19
17
18
815
461
149
238
11,402
-
-
13,065
1,136
16,389
-
17,525
30,590
1,097
305
7,222
720
173
(8,178)
27,160
28,499
30
100
-
168
41
-
11,213
1,206
12,728
298
2,978
16,002
19,278
32,006
6,070
12,053
-
720
307
(9,617)
17,164
26,697
-
28,529
26,697
2,061
-
2,061
1,385
3,924
5,309
30,590
32,006
The financial statements were approved by the Board of Directors and authorised for issue on 28 June 2022. They were signed on its behalf by:
M J de Villiers
Chairman
A.K.Sener
Managing Director
The accompanying notes form part of these financial statements.
5 3
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Company Statement of Financial Position
For the year ended 31 December 2021
Assets
Non-current assets
Trade and other receivables
Investments in group undertakings
Investment in associate accounted for using the equity method
Earn-In advances
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Called up share capital
Share premium
Capital reduction reserve
Share based payments reserve
Retained earnings
Total equity
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total equity and liabilities
Note
2021
£’000
2020
£’000
15
14
6
6
16
19
19
19
19
17
5,942
377
2,612
-
8,931
132
-
132
7,027
377
-
1,206
8,610
-
-
-
9,063
8,610
1,097
305
7,222
173
34
8,831
232
232
6,070
12,053
-
307
(9,826)
8,604
6
6
9,063
8,610
The financial statements were approved by the Board of Directors and authorised for issue on 28 June 2022.
They were signed on its behalf by:
M J de Villiers
Chairman
A.K.Sener
Managing Director
Registered number : 05403426
The accompanying notes form part of these financial statements.
5 4
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Share
capital
£’000
Share
premium
£’000
Other
reserves
£’000
Share
based
payments
reserve
£’000
Capital
Reduction
reserve
£’000
Translation
reserve
£’000
Retained
earnings
£’000
Total
attributable
to equity
holders of
parent
£’000
Non-
controlling
interest
£’000
Total
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
7,222
-
-
-
-
(5,970)
12,298
25,287
-
4,763
4,763
(3,647)
-
(3,647)
(3,647)
4,763
1,116
-
-
-
-
-
-
103
103
248
46
-
294
(9,617)
17,164
26,697
-
3,856
3,856
(2,948)
-
(2,948)
(2,948)
3,856
908
327
-
-
9,826
(3,820)
(3,820)
-
-
134
4,387
-
-
-
-
-
4,387
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,287
4,763
(3,647)
1,116
248
46
-
294
26,697
3,856
(2,948)
908
327
-
(3,820)
4,387
30
30
-
-
Changes in equity to
31 December 2020
Balance at
1 January 2020
Profit for the year
Other
comprehensive income
Total
comprehensive income
Issue of ordinary shares
Share options
Transfer between
reserves
Transactions
with owners
Balance at
31 December 2020
Changes in equity to
31 December 2021
Profit for the year
Other
comprehensive income
Total
comprehensive income
Court order –
reduction in capital
Dividend paid
to shareholders
Recycle of
translation losses
Transactions
between shareholders
Transfer between
reserves
Transactions
with owners
Balance at
31 December 2021
6,054
11,821
720
364
-
-
-
16
-
-
-
-
-
232
-
-
16
232
-
-
-
-
-
-
-
-
-
-
-
46
(103)
(57)
6,070
12,053
720
307
-
-
-
-
-
-
(4,995)
(12,053)
-
-
-
-
-
-
-
-
(4,973)
(11,748)
-
-
-
-
-
-
-
-
(134)
-
-
-
-
-
-
-
-
-
-
Issue of ordinary shares
22
305
The accompanying notes form part of these financial statements.
5 5
(134)
7,222
4,387
6,140
894
30
924
1,097
305
720
173
7,222
(8,178)
27,160
28,499
30 28,529
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT
Company Statement of Changes in Equity
For the year ended 31 December 2021
Share
capital
£’000
Share
premium
£’000
Capital
Reduction
Reserve
£’000
Share
based
payments
reserve
£’000
Retained
earnings
£’000
Changes in equity to
31 December 2020
Balance at 1 January 2020
6,054
11,821
Loss for the year
Other comprehensive income
Total comprehensive income
Issue of ordinary shares
Share options
Transfer between reserves
Transactions with owners
-
-
-
16
-
-
16
-
-
-
232
-
-
232
Balance at 31 December 2020
6,070
12,053
Changes in equity to
31 December 2021
Profit for the year
Other comprehensive income
Total comprehensive income
Issue of ordinary shares
-
-
-
22
-
-
-
305
-
-
-
-
-
-
-
-
-
-
-
-
-
Court order – reduction in capital
(4,995)
(12,053)
7,222
Dividend paid to shareholders
Transfer between reserves
-
-
-
-
Transactions with owners
(4,973)
(11,748)
Balance at 31 December 2021
1,097
305
-
-
7,222
7,222
The accompanying notes form part of these financial statements.
364
(8,838)
(1,091)
-
Total
£’000
9,401
(1,091)
-
(1,091)
(1,091)
-
-
103
103
248
46
-
294
(9,826)
8,604
3,720
-
3,720
-
3.720
3,720
-
9,826
327
-
(3,820)
(3,820)
-
-
-
-
46
(103)
(57)
307
-
-
-
-
-
-
(134)
134
-
(134)
6,140
(3,493)
173
34
8,831
Company statement of cash flows
For the year ended 31 December 2021
All bank transactions are undertaken by Ariana Exploration & Development Limited on behalf of Ariana Resources PLC and recharged accordingly.
As such the Company had no cash transactions directly, as was the case in 2020.
The accompanying notes form part of these financial statements.
5 6
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Cash flows from operating activities
Profit for the year
Adjustments for:
Profit on restructuring of group activities
Depreciation of non-current assets
Share of profit in equity accounted associate
Share of profit in joint venture
Share of loss in equity accounted associate
Share based payments charge
Investment income
Income tax expense
Movement in working capital
Decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Cash (outflow)/inflow from operating activities
Taxation paid
2021
£’000
2020
£’000
3,856
4,763
(6,423)
44
(4,260)
-
213
-
(202)
3,832
-
20
-
(6,478)
-
45
(7)
327
(2,940)
(1,330)
62
(271)
(3,149)
(2,923)
3,056
1,021
2,747
(282)
Net cash (used in)/generated from operating activities
(6,072)
2,465
Cash flows from investing activities
Earn-In Advances
Purchase of land, property, plant and equipment
Payments for intangible assets
Proceeds from restructuring of group activities
Purchase of associate investment
Purchase of financial assets at fair value through profit or loss
Dividends from associate
Dividends from joint venture
Investment income
(1,406)
(241)
-
28,951
(4,139)
(461)
705
-
202
(672)
(3)
(262)
-
-
-
-
776
7
Net cash generated from/(used in) investing activities
23,611
(154)
Cash flows from financing activities
Issue of share capital
Proceeds from non-controlling interest
Payment of shareholder dividend (excluding uncashed)
Net cash (used in)/generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange adjustment on cash and cash equivalents
326
30
(3,689)
(3,333)
14,206
2,978
(795)
248
-
-
248
2,559
453
(34)
Cash and cash equivalents at end of year
16,389
2,978
The accompanying notes form part of these financial statements.
5 7
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
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 2021.
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 is not expecting to raise additional
capital at this time, but may do so to support its strategy and
specific activities on occasion. The Group has no bank facilities
and has been meeting its working capital requirements from
cash resources. At the year end the Group had cash and cash
equivalents amounting to £16.389 million (2020: £2.978 million).
The Directors have prepared cash flow forecasts for the Group
for the period to 31 December 2023 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 associate (formerly Joint Venture) investment in
Zenit along with the normal operating costs for the Group over
the period together with the discretionary and non-discretionary
exploration and development expenditure.
The forecasts indicate that on the basis of existing cash and
other resources, and expected future dividend payments from
Zenit, the Group will have adequate resources to meet all its
expected obligations in delivering its work programme for the
forthcoming year.
5 8
The Group believes there should be no significant material
disruption to the mining operations in Zenit from COVID-19, but
the Board continues to monitor these risks and Zenit’s business
continuity plans.
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.
New Accounting Standards & Interpretations
(a) New and amended standards and interpretations mandatory for
annual financial statements beginning on or after 1 January 2021:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16:
Interest Rate Benchmark Reform – Phase 2
The adoption of these new accounting pronouncements has not
had a significant impact on the accounting policies, methods
computation or presentation applied by the Group and Company.
(b) Standards issued but not yet effective
The new and amended standards and interpretations that are
issued, but not yet effective, up to the date of issuance of the
Group’s financial statements are disclosed below. The Group
intends to adopt these new and amended standards and
interpretations, if applicable, when they become effective.
Amendments to IAS 1: Classification of Liabilities as Current or
Non-current.
Amendments to IFRS 3: Business Combinations Reference to the
Conceptual Framework.
Amendments to IAS 16: Property, Plant and Equipment: proceeds
before intended use.
Amendments to IAS 37: Onerous contracts – costs of Fulfilling a
Contract.
IFRS 1: First-time adoption of International Financial Reporting
Standards: subsidiary as a first-time adopter.
IFRS 9 Financial Instruments: Fees in the “10 per cent.” test for
derecognition of financial liabilities.
Annual Improvements to IFRS Standards 2018-2020 Cycle.
Amendments to IAS 8: Definition of accounting estimates.
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure
of Accounting Policies.
Amendments to IAS 12: Deferred Tax related to assets and
liabilities arising from a single transaction.
The Group is evaluating the impact of the new and amended
standards above which are not expected to have a material
impact on the Group’s results or shareholders’ funds statements.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of Ariana Resources PLC and its subsidiaries for the
year ended 31 December 2021.
Subsidiaries are all entities over which the Group has power to
direct relevant activities and an exposure to variable returns.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are de-consolidated from the
date that control ceases. The cost of an acquisition is measured at
fair value of the assets and equity instruments acquired, and the
liabilities incurred or assumed at the date of exchange.
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 The acquisition of subsidiaries is accounted for using the
purchase method. The cost of acquisition is measured at the fair
values, at the date of exchange, of the assets given, liabilities
incurred or assumed, and equity instruments issued.
The acquirer’s identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS3
are recognised at their fair values at the acquisition date. Where
the Group acquires a subsidiary for less than the fair value of its
assets and liabilities, this results in negative goodwill or gain on
acquisition which is recognised in profit and loss.
If a business combination is achieved in stages, the acquisition
date carrying value of the Group’s previously held equity interest
in the acquiree is remeasured to fair value at the acquisition
date; any gains or losses arising from such remeasurements
are recognised in the income statement. Where necessary,
adjustments are made to the financial statements to bring the
accounting policies used into line with those used by other
members of the Group. All significant intercompany transactions
and balances between group entities are eliminated on
consolidation.
The Group has applied IFRS 11 to all joint arrangements as of 1
January 2015. The Group identifies joint arrangements as those
arrangements in which two or more parties have joint control,
where joint control is evidenced by the contractually agreed
sharing of control of an arrangement, which exists where the
decisions about the relevant activities require the unanimous
consent of the parties sharing control.
Investments in joint arrangements are classified as either joint
operations or joint ventures depending on the contractual rights
and obligations of each investor.
Joint operations are identified as those agreements whereby
the parties have rights to the assets and obligations for liabilities
relating to the arrangement. Joint operations are accounted for
by recognising the operator’s relevant share of assets, liabilities,
revenues and expenses. The Group currently has no joint
operations in existence.
Joint ventures are identified as those agreements whereby
the parties have rights to the net assets of the arrangement
and are accounted for using equity accounting in accordance
with IAS 28. Interest in joint ventures are initially recognised at
cost and adjusted thereafter to recognise the Group’s share of
the post-acquisition profits or losses and movements in other
comprehensive income. When the Group’s share of losses in a
joint venture equals or exceeds its interests in the joint ventures
(which includes any long-term interests that form part of the
Group’s net investment in the joint ventures), the Group does
not recognise further losses, unless it has incurred obligations or
made payments on behalf of the Joint Venture.
An associate is an entity over which the Group is in a position
to exercise significant influence, but not control or joint control,
through participation in the financial and operating policy
decisions of the investee. Significant influence is the power to
participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies.
The results and assets and liabilities of our investments in our
associates are incorporated in these financial statements using
the equity method of accounting except when classified as
held for sale. Investments in associates are carried in the Group
5 9
statement of financial position at cost as adjusted by post-
acquisition changes in the Group’s share of the net assets of
the associates, less any impairment in the value of individual
investments. Losses of the associates in excess of the Group’s
interest in those associates are not recognised.
In the Company accounts, investments in subsidiary
undertakings are held at cost less impairment losses.
Income and expense recognition
The Group’s other income represents consideration received on
the disposal of licences, consultancy fees and interest receivable
from bank deposits. Interest income is accrued on a time basis,
by reference to the principal outstanding and the effective rate
of interest applicable. The effective interest rate is the rate that
exactly discounts estimated future cash receipts through the
expected life of the financial asset to the net carrying amount
of the financial asset. Operating expenses are recognised in
the statement of comprehensive income upon utilisation of
the service or at the date of their origin and are reported on an
accruals basis.
Foreign currency translation
Functional and presentational currency
Items included in the financial statements are measured using
the currency of the primary economic environment in which
the entity operates (the ‘functional currency’). The consolidated
financial statements are presented in Pounds Sterling, which is
the Group’s presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation
at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the
comprehensive income statement.
Group companies
The results and financial position of all the Group entities (none
of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
• assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that
statement of financial position;
• income and expenses for each income statement are
translated at average exchange rates (unless this average
is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the
transaction); and
• all resulting exchange differences are recognised as a
separate component of equity. On consolidation, exchange
differences arising from the translation of monetary items
receivable from foreign subsidiaries for which settlement is
neither planned nor likely to occur in the foreseeable future
are taken to shareholders’ equity. When a foreign operation
is sold, such exchange differences are recognised in the
statement of comprehensive income as part of the gain or
loss on sale.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
1. General Information continued
Earnings per share
Basic earnings per share amounts are calculated by dividing
the profit after taxation of the Group by the weighted average
number of shares outstanding during the year.
Land, property, plant and equipment
Land, property, plant and equipment are stated at cost less
accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to write off the cost of assets over
their estimated useful lives, using the straight-line method. The
estimated useful lives, residual values and depreciation method
are reviewed at each year end, with the effect of any changes in
estimate accounted for on a prospective basis.
Land
– not depreciated
Computer equipment – between 25% & 33%
Drilling equipment
– between 10% & 20%
Fixtures and fittings
– between 5% & 33%
Motor vehicles
– between 20% & 25%
The gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset
and is recognised in the statement of comprehensive income.
Intangible assets
Intangible assets include expenditure on software and databases
acquired to develop the Group’s geological expertise. Assets
within this category that have a finite useful life are amortised
over 20 years.
Intangible exploration assets
Intangible assets represent exploration and evaluation assets
(IFRS 6 assets), being the cost of acquisition by the Group of
rights, licences and know-how. Such expenditure requires the
immediate write-off of exploration and development expenditure
that the Directors do not consider to be supported by the
existence of commercial reserves.
All costs associated with mineral exploration and investments,
are capitalised on a project-by-project basis, pending
determination of the feasibility of the project. Costs incurred
include appropriate technical and administrative expenses but
not general overheads and these assets are not amortised until
technical feasibility and commercial viability is established. If an
exploration project is successful, the related expenditures will be
transferred to mining assets and amortised over the estimated
life of the commercial ore reserves on a unit of production basis.
Where a licence is relinquished or a project abandoned, the
related costs are written off.
The recoverability of all exploration and development costs is
dependent upon the discovery of economically recoverable
reserves, the ability of the Group to obtain necessary financing
to complete the development of reserves and future profitable
production or proceeds from the disposition thereof.
Exploration and evaluation assets shall no longer be classified as
such when the technical feasibility and commercial viability of
6 0
extracting mineral resources are demonstrable. When relevant,
such assets shall be assessed for impairment, and any impairment
loss recognised, before reclassification to mine development.
Assets classified as held for sale
Assets are classified as held for sale if their carrying amount will be
recovered primarily through a sale transaction rather than through
continuing use and a sale is considered highly probable. They are
measured at the lower of their carrying value and fair value less
costs to sell. An impairment loss is recognised for any subsequent
write-down of the asset to fair value less costs to sell.
Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets (except for intangible
exploration assets) to determine whether there is any indication
that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs. Where a
reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating
units, or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets
not yet available for use are tested for impairment annually, and
whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
Investment in Group undertakings
The Company’s investments in Group undertakings are carried
at historical cost less any provision for impairment. The
Company’s investments arose from either incorporation of, or
acquisition of subsidiary companies primarily based in Turkey.
As these investments are not amortised, their carrying values
are at risk of impairment. The carrying value of investments is
compared to their recoverable amounts which are assessed with
reference to the discounted cash flow forecasts associated with
these territories.
Financial instruments
Financial assets and financial liabilities are recognised on the
Group’s Statement of Financial Position when the Group becomes
a party to the contractual provisions of the instrument. The Group
derecognises a financial asset only when the contractual rights to
cash flows from the asset expire, or it transfers the financial asset
and substantially all the risks and rewards of ownership of the
asset to another entity. If the Group neither transfers nor retains
substantially all the risks and rewards of ownership and continues
to control the transferred asset, the Group recognises its retained
interest in the asset and an associated liability for the amount it
may have to pay. If the Group retains substantially all the risks and
rewards of ownership of a transferred financial asset, the Group
continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 The Group classifies the following at fair value through profit or
loss (FVPL):
exchange gains and losses are recognised in profit or loss. Any
gain or loss on derecognition is also recognised in profit or loss.
• equity instruments that are held for trading; andequity
instruments that are held for trading; and
• equity investments for which the Group has not elected to
recognise fair value gains and losses through OCI.
The Group derecognises financial liabilities when the Group’s
obligations are discharged, cancelled or expired.
Financial Assets
Trade and other receivables
Trade and other receivables are measured at initial recognition
at fair value, and are subsequently measured at amortised cost
less any provision for impairment. The Group applies the IFRS
9 simplified approach to providing for expected credit losses in
accordance with applicable guidance for non-banking entities.
Under the simplified approach the Group is required to measure
lifetime expected credit losses for all trade receivables. No credit
losses have been identified during the period.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and
on-demand deposits and other short-term highly liquid
investments that are readily convertible to a known amount of
cash with three months or less remaining to maturity and are
subject to an insignificant risk of changes in value.
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified according
to the substance of the contractual arrangements entered into.
Equity instruments
Financial instruments issued by the Company are treated as equity
only to the extent that they meet the following two conditions:
• they include no contractual obligations upon the Company to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Company; and
• where the instrument will or may be settled in the Company’s
own equity instruments, it is either a non-derivative that
includes no obligation to deliver a variable number of the
Company’s own equity instruments or is a derivative that will
be settled by the Company exchanging a fixed amount of
cash or other financial assets for a fixed number of its own
equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Company’s own shares,
the amounts presented in these financial statements for called
up share capital and share premium account exclude amounts in
relation to those shares.
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held-for-trading, it is a derivative or it is designated
as such on initial recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and losses, including any
interest expense, are recognised in profit or loss. Other financial
liabilities are subsequently measured at amortised cost using
the effective interest method. Interest expense and foreign
6 1
Share-based payments
For grants of share options, the fair value as at the date of grant
is calculated using the Black-Scholes option pricing model,
taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense
is adjusted to reflect the actual number of share options that
are likely to vest, except where forfeiture is only due to market
based conditions not achieving the threshold for vesting. Where
shares are issued in settlement of goods or services supplied,
the relevant expense is recorded in the consolidated statement
of comprehensive income, with the related share issue recorded
within share capital and share premium.
Provisions
Provisions are liabilities where the exact timing and amount of
the obligation is uncertain. Provisions are recognised when the
Group has a present obligation (legal or constructive) as a result
of past events, when an outflow of resources is probable to settle
the obligation and when an amount can be reliably estimated.
Where the time value of money is material, provisions are
discounted to current values using appropriate rates of interest.
The unwinding of any discount is recorded in net finance income
or expense.
Taxation
Current income tax assets and liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting year, that are unpaid at 31 December
2021. They are calculated according to the tax rates and tax laws
applicable to the fiscal periods to which they relate, based on the
taxable profit for the year.
Deferred income taxes are calculated using the liability method on
temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not provided on
the initial recognition of goodwill or on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in
subsidiaries is not provided if reversal of these temporary differences
can be controlled by the Group and it is probable that reversal will not
occur in the foreseeable future. In addition tax losses available to be
carried forward as well as other income tax credits to the Group are
assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting.
Deferred tax assets are recognised to the extent that it is probable
that the underlying deductible temporary differences will be able to
be offset against future taxable income. Current and deferred tax
assets and liabilities are calculated at tax rates that are expected
to apply to their respective period of realisation, provided they are
enacted or substantively enacted as at 31 December 2021. Changes
in deferred tax assets or liabilities are recognised as a component
of tax expense in the consolidated statement of comprehensive
income, except where they relate to items that are charged or
credited directly to equity in which case the related deferred tax is
also charged or credited to equity. The deferred tax asset arising
from trading losses carried forward as referred to in Note 8 has not
been recognised. The deferred tax asset will be recognised when it
is more likely than not that it will be recoverable.
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
Following the disposal during the year of all exploration
intangible assets by the Group, all staff costs are now written-off
as incurred. Amounts previously capitalised under exploration
expenditure in the prior year amounted to £658,000.
The average monthly number of employees (including Executive
Directors) during the year was as follows:
Exploration activities
Administration
2021
Group
Number
2020
Group
Number
14
7
21
14
5
19
The only employees within the Company were the directors.
3. Directors’ emoluments
Basic salary and fees
Pension contributions
2021
£’000
2020
£’000
440
40
480
367
41
408
Key management personnel consist of only the Directors. Details
of share options and interests in the Company’s shares of each
Director are highlighted in the Directors’ Report on page 42.
Michael de Villiers
Kerim Sener
William Payne
Christopher Sangster
Salary
& fees
£’000
Pension
£’000
Total
£’000
125
125
225
162
40
40
50
60
13
13
23
23
-
-
4
6
138
138
248
185
40
40
54
66
Year
2021
2020
2021
2020
2021
2020
2021
2020
William Payne’s services are provided by a firm of Accountants,
further details of which are set out in Note 23.
1. General Information continued
Segmental reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the Board of Directors who
have been identified as responsible for allocating resources and
assessing performance of the operating segments, and who act
as the Chief Operating Decision Maker.
Accounting judgements
The following are the critical judgements, apart from those
involving estimations (which are dealt with separately below),
that the directors have made in the process of applying the
Group’s accounting policies and that have the most significant
effect on the amounts recognised in the financial statements.
Accounting for equity accounted associate
Management have considered the 50% shareholding in Venus
Minerals Ltd and determined it is an associate rather than a
subsidiary due to the absence of control over that company, and
accordingly accounts for its investment in Venus Minerals Ltd
using the equity method in accordance with IAS 28 (revised).
Intangible exploration assets
Determining whether intangible exploration assets are impaired
requires an assessment of whether there are any indicators of
impairment, by reference to specific impairment indicators prescribed
in IFRS 6. This includes the assessment, on a project by project basis,
of the likely recovery of the cost of the Group’s intangible exploration
assets in the light of future production opportunities based upon
ongoing geological studies. This also involves the assessment of the
period for which the entity has the right to explore in the specific area,
or if it has expired during the period or will expire in the near future if it
is not expected to be renewed.
The Group determines that exploration costs are capitalised at
the point the Group has a valid exploration licence or is in the
process of renewal.
Impairment of assets, excluding intangible exploration assets
The Group assesses impairment at each reporting date on a
project by project basis by evaluating conditions specific to
the Group that may indicate an impairment of assets. Where
indicators of impairment exist, the recoverable amount of the
asset is determined based on value in use or fair value less cost
to sell, both of which require the Group to make estimates.
2. Staff costs
Wages and salaries
Social security costs
Share based payments
(option scheme)
Pension contributions
6 2
Group
Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
804
182
-
44
434
123
46
43
440
133
-
37
367
116
35
41
1,030
646
610
559
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 4. Operating loss
The operating loss is stated after charging/ (crediting):
Depreciation and amortisation – owned assets
Office lease rentals
Net foreign exchange (gains)
Fees payable to the Company’s auditor for the audit of the Group’s and Company’s annual accounts
Fees payable to the Company’s auditor for other services:
– The audit of the Company’s subsidiaries
5. Profit on restructuring of group activities
2021
£’000
44
12
(75)
50
25
2020
£’000
19
13
(502)
50
21
During February 2021, the Group concluded its restructuring programme. This comprised the part-disposal of its interest in Zenit
Madencilik San.ve Tic. A.S. (“Zenit”) and Pontid Madencilik San.ve Tic. A.S. (“Pontid”) to Ozaltin Insaat, Ticaret and Sanayi A.S. (“Ozaltin”) and
Proccea Construction Co (“Proccea”) for a total consideration of US$35.75m. Under the terms of the Pontid sale agreement and during the
year, Ozaltin completed its equity commitment to invest a further US$8m in the development of the Salinbaş project. A further US$2m is
to be paid in instalments to the Group by Zenit following the transfer of the three-remaining satellite remain projects held by the Group’s
wholly owned subsidiary, Galata Mineral Madencilik San. ve Tic. A.S.
Disposal proceeds receivable (net of group transactions)
Less:-
Cost of Investment and other incidental costs incurred on disposal
Reversal of fair value transactions associated with the Salinbaş acquisition
Increase in valuation of associate following acquisition
Reduction in valuation of JV following part disposal (excluding translation losses)
Recycled translation losses
Profit on restructuring of Group’s activities
2021
£’000
26,976
(4,684)
(9,466)
2,197
(4,234)
(4,386)
6,423
2020
£’000
-
-
-
-
-
-
-
6 3
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
6. Equity accounted Investments
The Group and Company’s investments comprise the following: -
Associates and joint ventures companies
Note
Associate Interest in Pontid Madencilik San. ve Tic. A.S. (“Pontid”)
Associate Interest in Venus Minerals Ltd (“Venus”)
Associate Interest in Zenit Madencilik San. Ve Tic. A.S. (”Zenit”)
Joint venture Interest in Zenit Madencilik San. Ve Tic. A.S. (”Zenit”)
6a
6b
6c
6c
Group
2021
£’000
4,139
2,399
4,864
-
Carrying amount of investment at 31 December
11,402
2,612
Company
2021
£’000
Group
2020
£’000
Company
2020
£’000
-
2,612
-
-
-
-
-
11,213
11,213
-
-
-
-
-
6a Associate Interest in Pontid.
Following the disposal by Greater Pontid 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 of US$8m 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
As at 31 December 2021
Assets
Non-current assets
Other receivables
Intangible exploration assets
Land, property, plant and machinery
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Total assets
Current liabilities
Other payables
Total current liabilities
Equity
Proportion of the Group’s ownership
Share of net assets per above analysis
Goodwill on acquisition and share of interest post acquisition
Carrying amount of investment in Pontid
6 4
2021
£’000
2020
£’000
10
1,120
96
1,226
5,230
86
5,316
6,542
229
229
6,313
23.5%
1,483
2,656
4,139
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 6b Share of loss of associate interest in Venus Minerals Ltd
The Company and group acquired 50% of Venus Minerals Ltd through an earn-in agreement on 5 November 2021.
The results set out below includes the Group’s share of loss for the period from significant influence to 31 December 2021.
At 1 January 2021
Advances paid during the year
Reclassification following conversion of rights
Share of loss since significant influence recognised by Group
At 31 December 2021
Group
2021
£’000
Company
2021
£’000
Equity
accounted
Associate
interest
Equity
accounted
Associate
interest
Group and
Company
2021
£’000
Earn-In
Advances
-
-
2,612
(213)
2,399
-
-
1,206
1,406
2,612
(2,612)
-
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 2021 the Group has a 23.5% (2020: 50%) interest in Zenit, and, profits from Zenit are shared in
the ratio of 23.5% (2020: 50%) the Group, 23.5% (2020: 50%) Proccea and the remaining 53% (2020: nil) interest to Ozaltin Holding A.S.
Zenit was incorporated in, and has its principal place of business in Ankara, Turkey.
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
For the year ended 31 December 2021
Revenue
Cost of sales
Gross Profit
Administrative expenses
Operating profit
Other income
Finance expenses including foreign exchange losses
Finance income including foreign exchange gains
Profit before tax
Taxation charge
Profit for the year
Proportion of the Group’s profit share
Group's share of profit for the year
6 5
2021
£’000
2020
£’000
32,784
29,145
(14,586)
(13,335)
18,198
(2,344)
15,854
124
(1,171)
5,213
20,020
(1,890)
18,130
23.5%
4,260
15,810
(1,750)
14,060
-
(3,143)
2,262
13,179
(223)
12,956
50%
6,478
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
6. Equity accounted Investments continued
6c Share of profit of interest in associate in Zenit
Statement of financial position
As at 31 December 2021
Assets
Non-current assets
Other receivables and deferred tax asset
Intangible exploration assets
Kiziltepe Gold Mine (including capitalised mining costs, land, property, plant and equipment)
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other receivables, VAT and prepayments
Total current assets
Total assets
Liabilities
Non-current liabilities
Borrowings
Deferred tax
Asset retirement obligation
Total non-current liabilities
Current liabilities
Borrowings
Trade payables
Other payables
Total current liabilities
Total liabilities
Equity
Proportion of the Group’s ownership
Carrying amount of investment in associate
2021
£’000
2020
£’000
295
70
15,804
16,169
6,680
650
2,033
2,521
11,884
1,244
670
18,817
20,731
8,031
286
2,598
2,004
12,919
28,053
33,650
412
367
616
2,126
-
924
1,395
3,050
884
1,406
3,671
5,961
7,356
20,697
23.5%
4,864
4,881
1,544
1,749
8,174
11,224
22,426
50%
-
Carrying amount of investment in joint venture
-
11,213
Movement in Equity – our share
Opening balance
Profit for the year
Part disposal of Interest
Translation and other reserves
Dividend receivable
Closing balance
6 6
11,213
4,260
(5,943)
(3,613)
(1,053)
4,864
7,768
6,478
-
(2,257)
(776)
11,213
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 7. 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 mineral resources.
• Reconciling items include non-mineral exploration costs and transactions between Group and associate companies.
Administrative costs
General and specific exploration expenditure
Profit on restructuring
Share of loss on new associate
Share of profit of associate (previously 50% joint venture)
Investment and other income
Mining
£’000
-
(67)
6,423
(213)
4,260
-
2021
Other
reconciling
items
£’000
Group
£’000
Mining
£’000
(2,917)
(2,917)
-
(35)
-
(67)
6,423
(213)
-
-
-
-
4,260
6,478
202
202
-
2020
Other
reconciling
items
£’000
Group
£’000
(1,360)
(1,360)
-
-
-
7
(35)
-
6,478
7
Profit before taxation
Taxation
Profit after taxation
Assets
Segment assets
Liabilities
Segment liabilities
Additions to segment assets
Intangible assets
Property, plant & equipment
Depreciation and amortisation
Geographical segments
10,403
(2,715)
7,688
6,443
(1,353)
5,090
(3,832)
-
(3,832)
(43)
(284)
(327)
6,571
(2,715)
3,856
6,400
(1,637)
4,763
17,480
13,110
30,590
29,937
2,069
32,006
(1,610)
(451)
(2,061)
(5,056)
(253)
(5,309)
nil
241
-
nil
-
44
nil
241
44
263
19
-
-
-
(19)
263
19
(19)
The Group’s mining assets and liabilities are located primarily in Turkey.
Carrying amount of segment non-current assets
2021
United
Kingdom
£’000
Group
£’000
Turkey
£’000
2020
United
Kingdom
£’000
Group
£’000
2,761
13,065
11,353
1,375
12,728
Turkey
£’000
10,304
6 7
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
8. Taxation
Current tax expense in respect of the current year
Withholding tax suffered on subsidiary dividend
Current tax charge
The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:
Profit before tax – continuing operations
Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020:19%)
Effect of tax on share of associates profits and losses
Effect of tax on share of joint venture profit
Disallowable expenses and other adjustments
Effect of different tax rates and laws of subsidiaries operating in other jurisdictions
Other reconciling adjustments
Losses for the year to carry forward
Current tax charge
2021
£’000
3,832
(901)
2,931
2021
£’000
7,688
1,460
(769)
-
14
638
489
1,099
2,931
2020
£’000
327
(284)
43
2020
£’000
5,090
967
-
(1,235)
11
16
-
284
43
The Group has UK losses carried forward on which no deferred tax asset is recognised in the financial statements as the recovery of this
benefit is dependent on future profitability, the timing of which cannot be reasonably foreseen. Total UK losses carried forward amount to
approximately £16,620,000 (2020: £10,393,000), and non-UK losses amount to approximately £209,000 (2020: £306,000).
No deferred tax assets had been recognised against the Group’s and Company’ tax losses as the entities do not have sufficient taxable
temporary differences in the year against which the losses could be utilised.
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 Profit for the financial year was £3,720,000 (2020: Loss -
£1,091,000).
(b) Distributable reserves of parent company
The Company paid its first shareholder 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 and note 19.
(c) Dividends
An interim dividend was paid during the year ended 31 December 2021 of 0.35 pence per ordinary share amounting to £3,820,000
(2020: £nil).
10. Earnings per share on continuing operations
The calculation of basic profit per share is based on the profit attributable to ordinary shareholders of £3,856,000 (2020: £4,763,000)
divided by the weighted average number of shares in issue during the year being shares 1,085,894,966 (2020: 1,062,538,317). There is no
material effect on the basic earnings per share for the dilution provided by the share options.
6 8
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 11. Intangible assets
Cost or Valuation
At 1 January 2021
Amortisation charge
At 31 December 2021
Net book value
At 1 January 2021
At 31 December 2021
12. Land, property, plant & equipment
Cost
At 1 January 2020
Additions
Exchange movements
At 31 December 2020
Additions
Disposals
Exchange movements
At 31 December 2021
Depreciation
At 1 January 2020
Charge
Exchange movements
At 31 December 2020
Charge
Disposals
Exchange movements
At 31 December 2021
Net book value
At 1 January 2020
At 31 December 2020
At 31 December 2021
Software and Database expenditure
£’000
168
(19)
149
168
149
Land
£’000
Computer
equipment
£’000
Drilling
equipment
£’000
Fixtures &
fittings
£’000
Motor
vehicles
£’000
Totals
£’000
-
-
-
-
157
-
-
157
-
-
-
-
2
-
-
2
-
-
155
34
6
(6)
34
18
(3)
(12)
37
30
5
(5)
30
8
(2)
(9)
27
4
4
10
26
-
(6)
20
-
-
(9)
11
6
4
(1)
9
3
-
(4)
8
20
11
3
34
1
(7)
28
11
(8)
(9)
22
23
4
(5)
22
6
(8)
(8)
12
11
6
10
34
12
(7)
39
55
(7)
(13)
74
19
4
(4)
19
7
(5)
(7)
14
15
20
60
128
19
(26)
121
241
(18)
(43)
301
78
17
(15)
80
26
(15)
(28)
63
50
41
238
Of the total depreciation expense, £nil has been capitalised to intangible exploration assets (2020: £16,000).
6 9
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
13. Financial assets at fair value through profit or loss
Group and Company
At 1 January 2021
Addition in Panther Metals Ltd
Addition in Pallas Resources Ltd
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
Group
2021
£’000
-
188
273
461
-
461
During the year, the Group’s wholly owned subsidiary Asgard Metals Pty. Ltd. acquired shares in the following companies as set out below:
Panther Metals Ltd is listed on the Australian Stock Exchange, incorporated and domiciled in Australia. At the balance sheet date, its listed
price exceeded its acquisition cost by £35,000. This increase has not been reflected in profit or loss.
Pallas Resources Ltd is a private company limited by shares, incorporated and registered in the United Kingdom. At the balance sheet date as
an unlisted company, its fair value cannot be reliably measured and approximates to historical cost.
14. Investments in Group undertakings
Company
At 1 January 2021 & 31 December 2021
Shares in Group
undertakings
£’000
377
The Company’s investments at the balance sheet date comprise ownership of the ordinary share capital of the following companies:
Subsidiaries
Ownership
Country of
incorporation
Nature
of business
Address
Ariana Exploration &
Development Limited
100%
United Kingdom
Exploration
2nd Floor, Regis House, 45 King William Street
London, EC4R 9AN
7 0
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Ariana Exploration & Development Limited’s investments at the balance sheet date comprise the following companies
Subsidiaries
Ownership
Country of
incorporation
Nature
of business
Address
Portswood Resources Limited
Galata Mineral Madencilik San.
ve Tic. A.S.
100%
100%
British
Virgin Islands
Holding
company
Kingston Chambers P.O. Box 173 Road
Town, Tortola, British Virgin Islands
Turkey
Exploration
Çankaya Mah. Farabi Sok. 7/5
Çankaya, Ankara, Turkey
Greater Pontides Exploration B.V.
100%
Netherlands
Holding
company
Herengracht 500,
1017 CB Amsterdam, Netherlands
Asgard Metals Pty. Ltd.
100%
Australia
Exploration
Unit 27, 18 Stirling Highway,
Nedlands, WA 6009, Australia
Western Tethyan Resources Ltd
75%
United Kingdom
Holding
company
2nd Floor, Regis House,
45 King William Street, London, EC4R 9AN
Kosovo Mineral Resources LLC*
75% Republic of Kosovo
Exploration
Rr Ali Vitia Kalabri Bll. A-Lam-B. Nr.19
Prishtine, Kosova
*Kosovo Mineral Resources LLC is a 100% owned subsidiary of Western Tethyan Resources Ltd.
The non-controlling interest in the Group represents the cost of purchase of a 25% stake in Western Tethyan Resources Ltd amounting to
£30,000 (2020: nil)
15. Non-current other receivables
Amounts owed by Group undertakings
Amounts owed by associate interest
Other receivables
Group
Company
2021
£’000
2020
£’000
-
815
-
815
-
-
100
100
2021
£’000
5,942
-
-
2020
£’000
7,027
-
-
5,942
7,027
The amount owed to the Group relate 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. 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.
16. Other receivables
Other receivables
Amounts owed by associate interest
Prepayments
Group
Company
2021
£’000
219
792
125
1,136
2020
£’000
183
-
115
298
2021
£’000
132
-
-
132
2020
£’000
-
-
-
-
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.
7 1
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
17. Trade and other payables
Trade and other payables
Social security and other taxes
Other creditors and advances
Accruals and deferred income
Group
Company
2021
£’000
203
1,380
343
135
2,061
2020
£’000
147
14
1,099
125
1,385
2021
£’000
2020
£’000
94
-
132
6
232
-
-
-
6
6
The above listed payables are all unsecured. Due to the short-term nature of current payables, their carrying values approximate their
fair value.
18. Assets and liabilities classified as held for sale
Assets classified as held for sale
Intangible Exploration assets
Total assets of group held for sale
Liabilities directly associated with assets classified as held for sale
Deferred tax liabilities
Contingent consideration payable
Total liabilities of group held for sale
Group
Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
-
-
-
-
-
16,002
16,002
2,273
1,651
3,924
-
-
-
-
-
-
-
-
-
-
The above assets and liabilities held for sale were reclassified from non-current assets and non-current liabilities as at 31 December 2020
due to the Group concluding the disposal of its interests in its Salinbaş and all other exploration projects, held through its subsidiary
companies based in Turkey.
19. Called up share capital, share premium and capital reduction reserve
Allotted, issued and fully paid ordinary 0.1p shares
Number
Ordinary
Shares
£’000
Deferred
shares
£’000
Share
Premium
£’000
In issue at 1 January 2021
1,075,677,943
1,075
4,995
12,053
Share capital reduction scheme
Retained losses utilised
Share options exercised
-
-
22
21,000,000
In issue at 31 December 2021
1,096,677,943
1,097
(4,995)
(12,053)
-
-
-
-
305
305
Capital
reduction
reserve
£’000
-
17,048
(9,826)
-
7,222
During July 2021, the Company was granted permission by the High Court of Justice in England and Wales to reduce its share capital by
the cancellation of its share premium and its sub-divided deferred shares. This allowed the Company to extinguish retained losses bought
forward from the prior year amounting to £9,826,000.
7 2
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Potential issue of ordinary shares
Share options
The Company issued 64,000,000 new options to directors and staff at an exercise price of 1.55 pence, vesting over 3 years, commencing
on 1 January 2018. At 31 December 2021 the Company had options outstanding for the issue of ordinary shares as follows:
Date options
granted
Exercisable from
Exercisable
to
Exercise
price
Number
granted
Options exercised
during the year
Number at
31 December 2021
1 January 2018
1 January 2018
31 December 2023
1.55p
48,000,000
(21,000,000)
27,000,000
Total
48,000,000
(21,000,000)
27,000,000
The fair value of services received in return for share options are measured by reference to the fair value of share options granted. The fair
value of employee share options is measured using the Black-Scholes model. Measurement inputs and assumptions are as follows:
Costs associated with options issued on the 1 January 2018 and exercisable by 2023
Share price when options issued
Expected volatility (based on closing prices over the last 7 years)
Expected life
Risk free rate
Expected dividends
1.25p
67.84%
5 years
0.75%
0%
The expected volatility is wholly based on the historic volatility (calculated based on the weighted average of the last 7 years of quotation).
Share based payments reserve
At 1 January 2021
Transfer to retained earnings for options exercised during the year
At 31 December 2021
Group and Company
2021
£’000
307
134
173
As set out in note 2 the Group recognised an expense of £nil (2020: £46,000) relating to equity share based payment transactions in
the year.
7 3
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
20. Operating lease arrangements
Management have completed a detailed assessment of existing operating contracts and have not identified any contracts requiring adjustment
on the adoption of IFRS 16 as the operating leases held by the Group are of low value and short-term in nature.
At the year end, the Group had outstanding short term commitments for future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
Within one year
21. Capital commitments
2021
£’000
1
2020
£’000
16
The Group had no authorised or unauthorised capital commitments at the year end (2020: £nil).
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
Çamyol
26.5%
99%
127,766,456
4,529,343
31,941,614
996,455
1,779,606
55,516
23. Related party transactions
Group companies
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.
Ariana Resources PLC is the beneficial owner and controls, or is in joint venture with, the following companies and as such are considered
related parties:
Ariana Exploration & Development Ltd
Portswood Resources Ltd
Galata Mineral Madencilik San. ve Tic. A.S.
Asgard Metals Pty. Ltd.
Greater Pontides Exploration B.V.
Western Tethyan Resources Ltd and its wholly owned subsidiary Kosovo Minerals Resources LLC
Zenit Madencilik San. ve Tic. A.S. (Associate)
Pontid Madencilik San. ve Tic. A.S. (Associate)
Venus Minerals Ltd (Associate)
Transactions during the year between the Company and its subsidiaries were as follows:
Loan payable by Ariana Exploration & Development Limited to Ariana Resources PLC amounted to £5,941,508 (2020: £7,027,310).
Loan payable by Ariana Exploration & Development Limited to Western Tethyan Resources Ltd amounted to £240,000.
Loan payable by Kosovo Minerals Resources LLC to Ariana Exploration & Development Limited amounted to £240,000 (2020: £30,000)
7 4
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 William Payne is a partner in Azets, a firm of Accountants that provides his services. During the year end 31 December 2021, Azets were
paid £40,000 (2020: £40,000) in respect of his services as a Director, and £104,250 (2020: £119,775) in respect of accounting and
management services. Fees paid for William Payne’s services are included as part of Directors emoluments declared in Note 3. At the year
end the Group owed Azets £nil (2020: £25,105).
At 31 December 2021, Kerim Sener had received £nil or TL nil (2020: £63,455 or TL581,357) from Zenit Madencilik San. ve Tic. A.S. for
his services as a director of the joint venture subsidiary, in accordance with the Turkish Commercial Code and an Extraordinary General
Meeting resolution dated 1 November 2018. This remuneration is in addition to his emoluments disclosed in note 3.
Kerim Sener was appointed a director of Venus Minerals Ltd (“Venus”) on 13 August 2020 and continues to receive no remuneration
during the period to 31 December 2021. Venus is focused on the exploration and development of copper and gold on the island of Cyprus.
Transactions with Venus during the year and additional disclosures are set out on note 6.
Equity accounted investment in Zenit
Loans including unpaid dividends payable by Zenit Madencilik San. ve Tic. A.S. to Galata Mineral Madencilik San. ve Tic. A.S. amounted to
£1,607,291 (2020: £nil).
24. Post year end events
During March 2022 the Company issued 46,185,387 new ordinary shares at 4.11 pence per share to Newmont Corporation in connection
with a five year exploration and alliance agreement focused on copper and gold exploration within Bosnia and Herzegovina, Bulgaria,
Greece, Kosovo, North Macedonia and Serbia, utilising the exploration teams established within the Group.
25. Capital management policies and procedures
The Group’s capital management objectives are:
• To ensure the Group’s ability to continue as a going concern;
• To increase the value of the assets of the business; and
• To provide an adequate return to shareholders in the future when exploration assets are taken into production.
These objectives will be achieved by identifying the right exploration projects, adding value to these projects and ultimately taking them
through to production and cash flow, either with partners or by our own means.
The Group monitors capital on the basis of the carrying amount of equity, cash and cash equivalents as presented on the face of the
consolidated statement of financial position. Movements in capital for the year under review are summarised in Note 19 and in the
consolidated statement of changes in equity.
The Group manages its capital structure in response to changes in economic conditions and in accordance with the Group’s objective to
finance additional work on existing and new projects to enhance their overall value.
In the normal course of its operations, the Group and Company are exposed to gold prices, currency, interest rate and liquidity risk.
The Group and Company use financial instruments, other than derivatives, comprising short term deposits, cash, liquid resources and
various items such as sundry debtors and creditors that arise directly from its operations. The main purpose of these financial instruments
is to finance the Group’s operations.
The main risks arising from the Group’s and Company’s financial instruments are liquidity and currency differences on foreign currency net
investments. The Directors review and agree policies for managing these risks and these are summarised below.
Liquidity risk
Liquidity risk is the risk that the Group and Company will not be able to meet their financial obligations as they fall due.
The Group and Company seek to manage financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to invest
cash assets safely and profitably. The Board will seek additional funds from the issue of share capital where appropriate, by reviewing
financial and operational budgets and forecasts. The Group and Company’s financial liabilities, including interest bearing liabilities and
trade and other payables will all be settled within six months of the year end with the exception of the contingent consideration payable
which is not expected to become payable for a period beyond 5 years.
7 5
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT 2020
£’000
-
7,027
7,027
2020
£’000
7,027
-
-
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
25. Capital management policies and procedures continued
Credit risk
Credit risk is the risk of financial loss to the Group and Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. The Group and Company have borrowings outstanding from its subsidiaries and joint ventures, the ultimate
realisation of which depends on the successful exploration and realisation of the Group’s intangible exploration assets:
Trade and other receivables (current and excluding prepayments)
Trade and other receivables (non-current)
Group
Company
2021
£’000
1,011
815
1,826
2020
£’000
183
100
283
2021
£’000
132
5,942
6,074
The concentration of credit risk for trade and other receivables at the balance sheet date by geographic region was:
Group
Company
United Kingdom
Turkey
Other
2021
£’000
137
1,688
1
1,826
2020
£’000
32
251
-
283
2021
£’000
6,074
-
-
6,074
7,027
Market risk
Foreign exchange risk arises due to the Group’s and Company’s primary operations being in Turkey. The Group and Company have a
general policy of not hedging against its exposure of foreign investments in foreign currencies. The Group and Company are exposed to
translation and transaction foreign exchange risks and take profits or losses on these as they arise.
UK
Turkey
Other
Total
Group
Cash and cash equivalents
Trade and other receivables
Trade and other payables
2021
£’000
10,238
261
452
2020
£’000
597
129
263
2021
£’000
5,232
873
1,390
2020
£’000
2021
£’000
2020
£’000
2,117
162
932
919
2
219
264
7
200
2021
£’000
16,389
1,136
2,061
UK
Turkey
Other
Total
Company
Cash and cash equivalents
Trade and other receivables
Trade and other payables
2021
£’000
-
5,942
233
2020
£’000
-
7,027
6
2021
£’000
2020
£’000
2021
£’000
2020
£’000
-
-
-
-
-
-
-
-
-
-
-
-
2021
£’000
-
5,942
233
2020
£’000
2,978
298
1,385
2020
£’000
-
7,027
6
7 6
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021 Sensitivity analysis
Foreign exchange risk arises due to the Group’s and Company’s primary operations being in Turkey.
A 10% percent weakening of Turkish Lira against the Sterling at the reporting date would have decreased net assets by £1,079,824 (2020:
£1,296,000). This calculation assumes that the change occurred at the balance sheet date and had been applied to risk exposures existing
at that date.
Market risk - Borrowing facilities and interest rate risk
The Group and Company finances its operations primarily through its share of profits from its associate investment, and the issue of equity
share capital to ensure sufficient cash resources are maintained to meet short-term liabilities and future project development requirements.
Cash deposits are kept under regular review, with reference to future expenditure requirements and to maximise interest receivable.
Sensitivity analysis
(a) The Group and Company have limited exposure to changes to interest rates both locally and in Turkey since the interest accruing on
bank deposits was relatively immaterial.
(b) The Group and Company have no interest rate exposure on the loan finance provided during the year as the amounts owed by Group
undertakings are interest free.
Market risk – Equity price risk
The Group and Company’s exposure to equity price risk arises from its investment in equity securities.
Fair values of financial instruments
The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Where applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific to that asset or liability.
Set out below is a comparison by category of carrying amounts and fair values of all the Group’s financial instruments:
Carrying Amount
Fair Value
2021
£’000
2021
£’000
2020
£’000
2020
£’000
2021
£’000
2021
£’000
2020
£’000
2020
£’000
Group Company
Group Company
Group Company
Group Company
Financial assets
Cash and cash equivalents
16,389
Loans and receivables
Trade and other receivables (current)
Trade and other receivables (non-current)
1,011
815
-
-
5,942
2,978
298
100
Trade and other payables
(2,061)
(232)
(1,385)
Other financial liability
-
-
(1,651)
-
-
7,027
(6)
-
16,389
1,011
815
-
-
5,942
2,978
298
100
2,061
(232)
(1,385)
(1,651)
-
-
7,027
(6)
-
The fair value of trade and other receivables is estimated as the present value of future cash flows discounted at the market rate of
interest at the reporting date. For receivables and payables with a remaining life of less than one year, the notional amount is deemed to
reflect fair value. All other receivables and payables are, where material, discounted to determine the fair value.
When measuring the fair value of an asset or a liability, the Group and Company uses observable market data as far as possible. Fair values
are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Differences arising between the carrying and fair value are considered not significant to adjust for in these accounts. The carrying and fair
value of intercompany balances are the same as if they are repayable on demand.
7 7
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT Please note that this document is important and requires your immediate attention.
If you are in any doubt as to the action to be taken, please consult an independent adviser immediately. If you have sold
or transferred or otherwise intend to sell or transfer all of your holding of ordinary shares in the Company prior to the
record date (as described in Note 13) for the Annual General Meeting of the Company on 10 August 2022 12:00 noon you
should send this document, together with the accompanying Form of Proxy, to the (intended) purchaser or transferee or
to the stockbroker, bank or other agent through whom the sale or transfer was or is to be effected for transmission to the
(intended) purchaser or transferee. If you have sold some only of your ordinary shares then please retain this document.
The formal business of the Annual General Meeting (AGM) will only be to consider and vote upon the resolutions set out in the notice
of meeting.
We are pleased to invite shareholders to attend our AGM in person this year. We will continue to monitor developments and the latest
prevailing Government guidance and regulations relating to public gatherings prior to the holding of the AGM, and whether any changes
are required to the arrangements for the AGM. Shareholders are advised to check the Company’s website for any updates. Shareholders
are asked not to attend the AGM in person if they are displaying any symptoms of COVID-19 or have recently been in contact with anyone
who has tested positive
SHAREHOLDERS WISHING TO VOTE ON ANY OF THE MATTERS OF BUSINESS ARE STRONGLY URGED TO DO SO THROUGH
COMPLETION OF A FORM OF PROXY which must be completed and submitted in accordance with the instructions thereon. It is
emphasised that any forms of proxy being returned via a postal service should be submitted as soon as possible to allow for any delays
to or suspensions of postal services in the United Kingdom as a result of measures being implemented by the Government of the United
Kingdom. Shareholders wishing to vote on any matters of business are strongly urged to do so through registering their proxy
appointment and voting by proxy online and to appoint the Chairman of the Meeting as your proxy. This will enable the Chairman
of the Meeting to vote on your behalf, and in accordance with your instructions, at the AGM. Lodging of a Proxy Form does not
preclude a shareholder from attending in person and voting at the AGM.
Further information on voting procedures follows the resolutions below. Queries regarding these procedures may be directed to the
Company’s registrars, Computershare Investor Services plc, The Pavilions, Bridgewater Road, Bristol BS99 6ZY (telephone number:
+44 (0) 370 889 3196.
7 8
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021
Notice of the 2021 Annual General Meeting of
Ariana Resources PLC
Company Number: 05403426
Notice is hereby given that the 2022 Annual General Meeting
of Ariana Resources PLC (the “Company”) will be held at the
East India Club, 16 St James’s Square, London, SW1Y 4LH on 10
August 2022 at 12:00 Noon in order to consider and, if thought
fit, pass resolutions 1 to 6 as Ordinary Resolutions and Resolution
7 & 8 as Special Resolutions:
Ordinary resolutions
1. To receive the Annual Report and Accounts for the year ended
31 December 2021.
2. To re-elect William Payne who is retiring pursuant to Article 41.1.2
of the Articles of Association as a Director of the Company.
3. To re-elect Michael de Villiers who is retiring pursuant to Article
41.1.2 of the Articles of Association as a Director of the Company.
4. To declare a final dividend of 0.175 pence per Ordinary Share in
respect of the financial year ended 31 December 2021 to be paid
on 03 October 2022 to the holders of ordinary shares who are
shown on the register of members at the close of the business on
19 August 2022.
5. To re-appoint PKF Littlejohn as auditors and to authorise the
Directors to fix their remuneration.
6. That the directors be generally and unconditionally authorised to
allot Relevant Securities (as defined in the notes to this Notice)
up to a maximum nominal amount of £500,000 comprising:
a.
equity securities (as defined by section 560 of the
Companies Act 2016) of ordinary shares of 0.1p each in
the capital of the Company (“Ordinary Shares”) up to an
aggregate nominal amount of £250,000 in connection with
an offer by way of a rights issue:
i.
to holders of Ordinary Shares in proportion (as nearly as
may be practicable) to their respective holdings; and
ii. to holders of other equity securities as required by the
rights of those securities or as the directors otherwise
consider necessary, but subject to such exclusions or
other arrangements as the directors may deem necessary
or expedient in relation to treasury shares, fractional
entitlements, record dates, legal or practical problems in
or under the laws of any territory or the requirements of
any regulatory body or stock exchange; and
b.
in any other case, up to an aggregate nominal amount of
£250,000.
The power granted by this authority shall, unless renewed, varied
or revoked by the Company, expire on the date which is 15 months
after the date on which this resolution is passed or, if earlier, the
conclusion of the next annual general meeting of the Company
save that the Company may, before such expiry, make offers or
agreements which would or might require Relevant Securities
to be allotted and the directors may allot Relevant Securities in
pursuance of such offer or agreement notwithstanding that the
authority conferred by this resolution has expired.
This resolution revokes and replaces all unexercised authorities
previously granted to the directors to allot Relevant Securities
but without prejudice to any allotment of shares or grant of rights
already made, offered or agreed to be made pursuant to such
authorities.
Special resolutions
7. That, subject to the passing of Resolution 6 the Directors be
given the general power to allot equity securities (as defined
by Section 560 of the 2006 Act) for cash, either pursuant to
the authority conferred by Resolution 6 or by way of a sale of
7 9
treasury shares, as if Section 561(1) of the 2006 Act did not
apply to any such allotment, provided that this power shall be
limited to:
a.
the allotment of equity securities in connection with an
offer by way of a rights issue:
i.
to the holders of ordinary shares in proportion (as nearly
as may be practicable) to their respective holdings; and
ii. to holders of other equity securities as required by the
rights of those securities or as the Directors otherwise
consider necessary, but subject to such exclusions or
other arrangements as the Board may deem necessary
or expedient in relation to treasury shares, fractional
entitlements, record dates, legal or practical problems in
or under the laws of any territory or the requirements of
any regulatory body or stock exchange; and
b.
the allotment (otherwise than pursuant to paragraph 7a
above) of equity securities up to an aggregate nominal
amount of £250,000.
The power granted by this resolution will unless renewed, varied
or revoked by the Company, expire at the conclusion of the next
Annual General Meeting of the Company following the date of the
passing of this resolution or (if earlier) 15 months from the date
of passing this resolution, save that the Company may, before
such expiry make offers or agreements which would or might
require equity securities to be allotted after such expiry and the
Directors may allot equity securities in pursuance of any such offer
or agreement notwithstanding that the power conferred by this
resolution has expired.
This resolution revokes and replaces all unexercised powers
previously granted to the Directors to allot equity securities as if
section 561(1) of the 2006 Act did not apply, but without prejudice
to any allotment of equity securities already made or agreed to be
made pursuant to such authorities.
8. That, the Company be authorised generally and unconditionally
to make market purchases (within the meaning of section 693(4)
of the Companies Act 2006) of ordinary shares of £0.001 each,
provided that:
a.
the maximum aggregate number of ordinary shares that
may be purchased is 5% of the issued share capital of the
Company as at the date of the market purchase;
b.
the minimum price (excluding expenses) which may be paid
for each ordinary share is £0.001;
c.
the maximum price (excluding expenses) which may be
paid for each ordinary share is to be no higher than the
average mid-market closing price of an ordinary share in the
Company on the day prior to the day the purchase is made;
d.
the authority conferred by this resolution shall expire at the
conclusion of the Company’s next annual general meeting
save that the Company may, before the expiry of the
authority granted by this resolution, enter into a contract
to purchase ordinary shares which will or may be executed
wholly or partly after the expiry of such authority.
e.
the directors may hold any such ordinary shares in Treasury
and are then entitled to resell the same, satisfy the issue of
new ordinary shares or cancel any such ordinary shares so
acquired, as allowed by the Companies Act.
By Order of the Board dated
28 June 2022
ARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021FINANCIAL REPORT
electronic proxy appointment service may do so for the
meeting (and any adjournment of the meeting) by following
the procedures described in the CREST Manual available on
the website of Euroclear UK and Ireland Limited (“Euroclear”)
at www.euroclear.com. CREST Personal Members or other
CREST sponsored members (and those CREST members
who have appointed a voting service provider) should refer
to their CREST sponsor or voting service provider, who will
be able to take the appropriate action on their behalf. In
order for a proxy appointment or instruction made by means
of CREST to be valid, the appropriate CREST message (a
“CREST Proxy Instruction”) must be properly authenticated in
accordance with Euroclear’s specifications and must contain
the information required for such instructions, as described
in the CREST Manual. The message (regardless of whether it
constitutes the appointment of a proxy or an amendment to
the instruction given to a previously appointed proxy) must,
in order to be valid, be transmitted so as to be received by
Computershare Investor Services PLC.
12.
13.
You may not use any electronic address provided in this proxy
form to communicate with the Company for any purposes
other than those expressly stated.
Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, the time by which a person must be
entered on the register of members in order to have the right
to attend and vote at the Annual General Meeting is 12 noon
on 8 August 2022, (being not more than 48 hours prior to the
time fixed for the Meeting) or, if the Meeting is adjourned, such
time being not more than 48 hours prior to the time fixed for
the adjourned meeting. Changes to entries on the register of
members after that time will be disregarded in determining the
right of any person to attend or vote at the Meeting.
14.
As at 28 June 2022 (being the last practicable date prior to the
publication of this Notice) the Company’s issued ordinary share
capital consists of 1,142,863,330 ordinary shares of £0.001
each, carrying one vote each. No shares are held in treasury.
Therefore the total voting rights in the Company as at that date
are 1,142,863,330.
Relevant Securities means:
• Shares in the Company other than shares allotted pursuant to:
• an employee share scheme (as defined
by section 1166 of the Act);
• a right to subscribe for shares in the Company where the
grant of the right itself constituted a Relevant Security; or
• a right to convert securities into shares in the Company where
the grant of the right itself constituted a Relevant Security.
• Any right to subscribe for or to convert any security into
shares in the Company other than rights to subscribe for
or convert any security into shares allotted pursuant to an
employee share scheme (as defined by section 1166 of the
Act). References to the allotment of Relevant Securities
in the resolution include the grant of such rights.
Notes:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
As a member of the Company you are entitled to appoint a
proxy to exercise all or any of your rights to attend, speak
and vote at a general meeting of the Company. You can only
appoint a proxy using the procedures set out in these notes.
Appointment of a proxy does not preclude you from attending
the meeting and voting in person. If you have appointed
a proxy and attend the meeting in person, your proxy
appointment will automatically be terminated.
A proxy does not need to be a member of the Company but
must attend the meeting to represent you. To appoint as your
proxy a person other than the Chairman of the meeting, insert
their full name in the box. If you sign and return this proxy
form with no name inserted in the box, the Chairman of the
meeting will be deemed to be your proxy. Where you appoint
as your proxy someone other than the Chairman, you are
responsible for ensuring that they attend the meeting and
are aware of your voting intentions. If you wish your proxy to
make any comments on your behalf, you will need to appoint
someone other than the Chairman and give them the relevant
instructions directly.
You may not appoint more than one proxy to exercise rights
attached to any one share.
To direct your proxy how to vote on the resolutions mark
the appropriate box with an ‘X’. To abstain from voting on a
resolution, select the relevant “Vote withheld” box. A vote
withheld is not a vote in law, which means that the vote will
not be counted in the calculation of votes for or against the
resolution. If you give no voting indication, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will
vote (or abstain from voting) as he or she thinks fit in relation to
any other matter which is put before the meeting.
To appoint a proxy you must ensure that the attached proxy
form is completed, signed and sent to Computershare Investor
Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY
by no later than 12 noon on 8 August 2022.
In the case of a member which is a company, the Form of Proxy
must be executed under its common seal or signed on its behalf
by an officer of the company or an attorney for the company.
Any corporation which is a member can appoint one or more
corporate representatives who may exercise on its behalf all
of its powers as a member provided that they do not do so in
relation to the same shares.
Any power of attorney or any other authority under which this
proxy form is signed (or a duly certified copy of such power or
authority) must be included with the proxy form.
In the case of joint holders, where more than one of the joint
holders purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority
is determined by the order in which the names of the joint
holders appear in the Company’s register of members in
respect of the joint holding (the first-named being the most
senior).
11.
If you submit more than one valid proxy appointment, the
appointment received last before the latest time for the
receipt of proxies will take precedence. CREST members
who wish to appoint a proxy or proxies through the CREST
8 0
FINANCIAL REPORTARIANA RESOURCES PLC - ANNUAL REPORT & ACCOUNTS 2021