4th Jun 2018 12:00
LONDON (Alliance News) - Ariana Resources PLC said on Monday that it had recorded a severely narrowed annual profit after acquisition gains plummeted.
Ariana is a gold and silver mining company with mines in north eastern Turkey and in 2017 it made a pretax profit of GBP424,000, more than twenty-eight times less than its GBP12.1 million pretax profit in 2016.
Ariana Resources generated no revenue in 2017.
While exploration and administrative costs did rise, the single factor most responsible for the change was that Ariana made GBP12.4 million in 2016 from its acquisition of the remaining interest in Greater Pontides Exploration BV. No such gains were recorded in 2017, resulting in a lower profit.
Another contributing factor to profit reduction was the company's increase in administrative expenses, which grew from GBP930,000 to GBP1.3 million.
The company's Zenit Madencilik San ve Tic AS joint venture mine started production in July 2017 and produced annual revenue exceeding USD14 million. However, only GBP8.9 million was produced "following the declaration of commercial production".
Ariana's share of Zenit's revenue amounted to a GBP1.8 million profit of joint venture in 2017, swinging from a GBP2.1 million loss the year before.
The company has repaid USD10 million, approximately one third, of its mine construction loan and net current assets. In his statement, Chairman Michael de Villiers noted the company's share placements, which were issued for a net consideration of £2.8 million.
"It is pleasing to see that as of February 2018, we are now receiving funds back from Zenit, which is the realisation of a plan set several years ago, to put ourselves in a position where we could become self-financing, and that seems a much closer proposition now," de Villiers added.
Shares in Ariana Resources were down 1.6% at 1.30 pence on Monday.
Related Shares:
Ariana