Half Yearly Report

Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining & Exploration

23 December 2013

Ortac Resources Limited

('Ortac' or 'the Company')

Unaudited Interim Results

Ortac Resources Limited, the AIM listed exploration and development company currently engaged on the advancement of the Šturec precious metal deposit in Slovakia ("Šturec"), is pleased to announce its unaudited financial results for the six months ended 30 September 2013.

Chairman's Statement

Over the past six months, Ortac has continued to focus on three previously highlighted areas: the technical advancement of its Šturec deposit, the evolution of the associated Šturecland investment concept, and the rationalisation and development of our portfolio of projects.

Since the completion of the Pre-Feasibility Study in April 2013, our main technical focus has been on two milestones: the first the preparation and submission of an underground trial mining application that would also satisfy the terms of our mining license, and the second a Biodiversity Baseline Study ("BBS") covering an area of 50 km2 surrounding the Šturec deposit.

As regards the trial underground mining application, the Preliminary Environmental Report connected to this application has just recently been approved by the Slovak Environmental Office, paving the way to the final stage of this particular permit application, which will be dealt with by the Slovak Mining Bureau. At the same time, a decision from the Slovak Environmental Office is pending in connection with our earlier application for trial surface mining, and we expect this to be made during the coming period. It should be noted however, and for the avoidance of any doubt, that the Slovak Mining authorities have confirmed to us in writing, that Ortac's surface and underground rights to the Kremnica Mining area are still in place.

As to the BBS, this study was commissioned so to establish environmental benchmarks against which the impact of any potential investment may be assessed. The BBS has been conducted by a team of renowned Slovak specialists and contains both qualitative and quantitative surveys of flora and fauna in the study area, and we expect to be in a position to announce the results from it soon.

BBS benchmarks will be an important element of our planned Environmental and Social Impact Assessment program, the objective of which will be the co-development of a finalised "master" project for Sturec. Our intention is that the finalised "master" project will, with the support of stakeholders who will have been involved in its elaboration, then be formally submitted to the Slovak Authorities to go through the statutory permit application process.

In parallel to the BBS and as previously reported, under the guidance of astoneco management, we have initiated and created with interested local stakeholders an investment concept currently called Šturecland, which is the cornerstone of our Šturec project development. The heart of the Šturecland concept is to use the gold and silver in the ground as an economic platform from which to create long term sustainable businesses that would be beneficial to both Ortac and the local stakeholders.

The Šturecland concept continues to evolve as more feedback and dialogue is received. What we can now say is that compared to an almost complete refusal to engage in any form of dialogue connected with a standalone mining project; we now find that of the many hundreds of those now engaging, in the region of 80% are asking for more complete and open dialogue around the co-design of the Šturecland concept. We take considerable reassurance from this, as it supports our view that we are on the correct path to develop a project which will meet the needs and expectations of stakeholders and shareholders alike.

Finally, and consistent with what we previously reported- to restrict our Slovak activities to Kremnica and Šturec- we have recently surrendered our licenses in the east of Slovakia, and will be winding down the activities associated with them over the coming months. At the same time, the Board has been extremely active in pursuit of other projects, and hopes to report success in this regards in the near term.

Financial & Corporate Overview

For the six months ended 30 September 2013, Ortac reports a loss on ordinary activities of £870,000 (2012: £785,000) and a retained loss of £870,000 (2012: £785,000).

The loss per share was £0.004 (2012: £0.003).

Outlook

On a corporate level, Ortac continues to posses a reasonable cash treasury, whilst our balance sheet enables us to continue our development objectives, and still provides us with flexibility when considering potential transactions to build our portfolio of assets.

The Board continues to assess projects which may enhance shareholder value, and while we have indentified a number which met our investment criteria, so far we have not yet concluded a transaction. Our evaluation process is on-going and we continue to remain proactive in appraising projects which would further build and strengthen our portfolio.

As the annual festive season draws near, I would like to thank our shareholders for their valued support, and look forward to providing further updates on Ortac's progress in the coming year.

Anthony Balme

Chairman

December 2013

For further information please visit www.ortacresources.com or contact:

Vassilios Carellas Ortac Resources Ltd Tel: +44 (0) 20 7389 9050

Charles Wood Ortac Resources Ltd Tel: +44 (0) 20 7389 9050

Stewart Dickson Cantor Fitzgerald Europe Tel: +44 (0) 20 7894 7000

Catherine Leftley Cantor Fitzgerald Europe Tel: +44 (0) 20 7894 7000

Jeremy Stephenson Cantor Fitzgerald Europe Tel: +44 (0) 20 7894 7000

Jen Boorer RFC Ambrian Limited Tel: +44 (0) 20 3440 6800

Jonathan Williams RFC Ambrian Limited Tel: +44 (0) 20 3440 6800

CONSOLIDATED FINANCIAL STATEMENTS

Group Income Statement for the Interim Period Ended 30 September 2013

Group Statement of Comprehensive Income for the Interim Period Ended 30 September 2013

Group Statement of Financial Position as at 30 September 2013

Group Statement of Changes in Equity for the Interim Period Ended 30 September 2013

Group Cash Flow Statement for the Interim Period Ended 30 September 2013

NOTES TO THE INTERIM REPORT FOR SIX MONTHS ENDED 30 SEPTEMBER 2013

1. Basis of preparation

The financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the BVI Business Companies Act applicable to companies reporting under IFRS.

The financial information for the period ended 30 September 2013 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory annual financial statements for the year ended 31 March 2013.

The financial information contained in this document does not constitute statutory accounts. In the opinion of the directors, the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.

The Board of Directors approved this Interim Financial Report on 12 December 2013.

Statement of compliance

The condensed consolidated interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2013, which have been prepared in accordance with IFRS as adopted by the European Union.

The following new IFRS standards and/or amendments to IFRS standards are mandatory for the first time for the Group. Except as other wise noted, the implementation of these standards did not have a material effect on the Group: 

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows: 

1. Effective date 1 January 2014 for the EU.

2. Not relevant to the Group

3. Not yet endorsed by the EU.

Basis of consolidation

The consolidated financial statements comprise the financial statements of Ortac Resources Limited and its controlled entities. The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

All inter-company balances and transactions have been eliminated in full.

Foreign currencies

At present the Group's functional and presentational currency is pounds sterling (£), though in future the Group's functional currency may change once its investments become operational. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency and as at the reporting date the assets and liabilities of these subsidiaries are translated into the presentation currency of Ortac Resources Limited, which are pounds sterling.

2. Segmental analysis

Segment information is presented in respect of the Group's management and internal reporting structure. As currently the Group is not producing, no revenue is being generated other than interest, and the main business segment is that of a corporate administrative entity. Segment information includes items directly attributable to a segment, as well as those that can be allocated on a reasonable basis.

3. Loss per share

The calculation of earnings per share is based on the loss after taxation divided by the weighted average number of share in issue during the period:

As the inclusion of the potential ordinary shares would result in a decrease in the loss per share, they are considered to be anti-dilutive, and as such, a diluted loss per share is not included.

5. Share capital

The authorised share capital of the Company and the called up and fully paid amounts at 30 September 2013 were as follows:

Total share options in issue

On the 6 August 2013, 60,000,000 share options with a fair value of £76,570 were issued in three tranches of 20,000,000 with exercise prices of 1.1p, 1.5p and 1.8p. The fair value charge for the period was £61,399 of which £35,339 relates to options granted during the period, with a further £26,061 charged in respect of options granted in prior periods and which vested during the six month period to 30 September 2013. Further, and as a result of fair value charges associated with options granted in prior periods, and the cancellation of options in prior periods, a fair value charge of £102,684 arose in the year to 31 March 2013 and this is included in the restated reserves as at 31 March 2013.

The following table lists the inputs into the Black-Scholes Model to determine the fair value of options issued during the period:

As at 30 September 2013 unexercised options in issue were:

Total share warrants in issue

During the period ended 30 September 2013, no warrants were granted and none lapsed or were cancelled. During the year ended 31 March 2013 20,000,000 share warrants were issued in connection with an equity financing facility. The issue gave rise to a fair value charge of £83,420 which has been charged against the restated Share Premium account as at 31 March 2013.

The following table list the inputs into the model for the valuation of share warrants issued in the year to 31 March 2013:

As at 30 September 2013 unexercised warrants in issue were:

6. Investment in group companies

At 30 September 2013, the Group held 100% of the share capital of the following wholly owned subsidiary companies:

7. Intangible assets

8. Tangible assets

9. Contingent liability

As part of its acquisition of Kremnica Gold s.r.o. and Kremnica Gold Mining s.r.o., Ortac Resources plc agreed to pay:

a) Vendor royalties of up to US$3,750,000 in either shares or cash - being $15 per ounce on the first 250,000 ounces of gold equivalent (gold plus silver) resource defined as proven and probable reserve in the bankable feasibility study. Said royalty will become payable within 60 days of all required permits being obtained to allow commercial production at the Kremnica property; and

b) A 2 per cent Net Smelter Royalty ("NSR") on gold and silver production from the Kremnica Gold Project to a limit of the first 1,000,000 ounces produced, reduced to a 1 per cent NSR on the next 1,000,000 ounces and zero per cent thereafter. At any time prior to the reduction of the NSR percentage to 1 per cent, Ortac may acquire half of the 2 per cent NSR for US$1,000,000. After the reduction of the NSR to 1 per cent, the Purchaser may acquire all of the Vendor NSR for US$1,000,000. 

On the basis of the updated Snowdens resource study, the Directors are confident that proven and probable reserves will significantly exceed 250,000 ounces of gold equivalent (gold plus silver) resource. Notwithstanding this, until such time as it is clear that all the required permits to achieve commercial production will be secured, no provision for such amounts can be included in the Group financial statements.

10. Post balance sheet events

There are no post balance sheet events to disclose

11. Other Matters

The financial information set out above does not constitute the Group's statutory accounts for the period ended 30 September 2013 or for earlier periods, but is derived from those accounts where applicable.

A copy of this interim statement is available on the Company's website: www.ortacresources.com.