Final Results

1 June 2009 AIM / PLUS Markets: AAU FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008 35% increase in JORC resource Initial revenues expected shortly Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, announces its final results for the year ended 31 December 2008. The period was one of excellent progress on a number of fronts and the Company has made the transition from exploration to mine development. Ariana's near term objective is to establish a profitable gold mining operation in Turkey, and trial mining has commenced since the period end. This will create a platform for achieving the longer term goal of establishing a gold resource of at least one million ounces through further exploration on existing properties. Highlights: § Current resource base of 401,000 oz gold equivalent § Tavsan gold project purchased from Odyssey Resources Limited § JV with European Goldfields progressing in north-eastern Turkey § £928,551 investment by European Goldfields Limited Post Period Events: § Additional £500,000 fundraising in January § Trial mining and processing underway at Kiziltepe § Muratda gold project purchased from Newmont Mining Michael Spriggs, Chairman, commented: "2008 saw major advances for the Company. Among a number of key areas of progress, Ariana has made the all-important transition from exploration to mine development. "We have significantly increased the resource base of the Company and, having weathered a difficult period, we believe the outlook is now substantially brighter with initial revenues expected shortly." The report and accounts for this period will be posted to shareholders and will be available on the website Contacts: Ariana Resources plc Tel: 020 7407 3616 Michael Spriggs, Chairman Kerim Sener, Managing Director Beaumont Cornish Limited Tel: 020 7628 3396 Roland Cornish Lothbury Financial Tel: 020 7011 9411 Michael Padley / Libby Moss Alexander David Securities Limited Tel: 020 7448 9820 Nick Bealer / David Scott Loeb Aron & Company Ltd Tel: 020 7628 1128 Peter Freeman / Frank Lucas Editors' note: Dr Kerim Sener, BSc (Hons), MSc, PhD, is the Managing Director of Ariana Resources plc. A graduate of the University of Southampton in Geology, he also holds a Master's degree from the Royal School of Mines (Imperial College, London) in Mineral Exploration and a doctorate from the University of Western Australia. He is a Fellow of The Geological Society of London and has worked in geological research and mineral consultancy in Southern Africa and Australia. He has read and approved the technical disclosure in this regulatory announcement. About Ariana Resources Ariana is an exploration and development company focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey. The Company is exploring a portfolio of prospective licences selected on the basis of its in-house geological and remote-sensing database, on its own in western Turkey and in Joint Venture with European Goldfields Limited in north-eastern Turkey. The Company's flagship assets are its Sindirgi and Tavsan gold projects. Both projects contain a series of prospects, within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey. This Province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits. These core projects, which are separated by a distance of 75km, are presently being assessed as to their economic merits. The total resource inventory of the Company stands at 401,000 ounces of gold equivalent. Loeb Aron & Company Ltd. and Alexander David Securities Limited are joint brokers to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser. For further information on Ariana you are invited to visit the Company's website at CHAIRMAN'S STATEMENT At Ariana Resources we pride ourselves on our ability to differentiate our Company's activities from those of similar-sized AIM exploration companies. We place great emphasis on our ability to deliver on our stated objectives. Ariana's near term objective is to establish a profitable gold mining operation in Turkey. This will create a platform for achieving our longer term goal of establishing a gold resource of at least one million ounces through further exploration. CORPORATE DEVELOPMENTS 2008 saw major advances for the Company. Among a number of key areas of progress, which I highlight below, Ariana has made the all-important transition from exploration to mine development. At the same time, the Company has continued to develop its clearly defined regional strategy in western Turkey and established an exploration Joint Venture with European Goldfields Limited in northeastern Turkey. Ariana is developing two principal projects in western Turkey, Sindirgi and Tavsan, and is exploring several other advanced project areas. Between these two principal projects, our resource inventory now contains 401,000 ounces gold equivalent (gold plus silver), representing a 35% increase in our resource base since last year. This was achieved through further exploration at Kiziltepe and the acquisition of Tavsan. At the Sindirgi Project, the additional drilling completed during the year at Kiziltepe resulted in an increased JORC-compliant resource of 186,000 oz gold equivalent. Geophysical work on Kiziltepe, completed in September, identified several strong anomalies suggesting vein continuity beneath an area of surface cover located between the Arzu South and Arzu North vein systems. In November, mine permitting at Kiziltepe was completed, paving the way for trial mining. At the Tavsan Project, acquired from Odyssey Resources Limited, a JORC-compliant resource of 215,000 oz gold equivalent was established: representing an acquisition cost of US$ 3.7 per ounce. Metallurgical testwork undertaken on the ore from Tavsan demonstrated its amenability to heap leach processing. Meanwhile, exploration undertaken in northeastern Turkey by the European Goldfields Joint Venture identified promising new porphyry-type targets at the Ardala Project. Some of these targets are scheduled to be drilled in 2009. Post year-end, in January 2009, the Company completed a placing for £500,000 (gross of share issue costs). The placing was supported by the Board and by our major shareholders, including European Goldfields Limited, which maintained its position in Ariana at approximately 20%. In March 2009, the Company finalised a trial processing agreement for the Kiziltepe deposit with local mining group Eti Gümüs A.S. In April 2009, Ariana acquired the Muratdag Gold Project from Newmont Mining Corp. The addition to Ariana's portfolio of this advanced exploration asset has further increased the value of the Company's project pipeline in western Turkey. Consistent with our medium term strategy, we intend to carry out the work necessary to advance this project up the project value curve. OUTLOOK In my report last year, I promised a year of exciting developments. I had not intended this as a euphemism to describe the trying market conditions which then unfolded. As it turned out, Ariana was obliged to take several tough measures towards the latter part of the year in order to maintain our strategic course. To conserve funds, we reduced exploration expenditure in 2008, a decision which regrettably meant we had to reduce our professional workforce in Turkey. Work continued on Sindirgi, but we were obliged temporarily to curtail work at Tavsan, and on our broader exploration programme. Having weathered a difficult period for the AIM market, we believe the outlook is now substantially brighter. Since late 2008, the gold price has progressively risen and is maintaining levels around US$900 per ounce. This strength reflects in large part continuing concerns about the global economy, and it is significant that Western governments have sought to repair their financial systems via increased spending. A corollary of this is that greater funding is becoming available for the AIM mining sector, particularly for those companies able to demonstrate near-term production. The improvement in Ariana's share price this year reflects this and it is a gratifying development. The funding secured from our January 2009 placing has provided additional support and given us the flexibility to proceed with our plans for trial mining at Kiziltepe. In this context, our exploration team is assessing other opportunities for near-term cash-flow in the vicinity of Kiziltepe and, at the time of writing, we had reported very encouraging sampling results from the nearby Kepez prospect. Provided trial mining at Kiziltepe proceeds to plan, Ariana can expect initial cash flows from this operation in the near future. We are also aiming to determine the optimum route for turning the Tavsan project to account. In terms of future exploration we will continue to concentrate our efforts on the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey, which remains highly prospective for the discovery of large epithermal and porphyry deposits. This is an area in which we have developed unique expertise, accumulated an enormous amount of technical data, established invaluable local relationships, and where we have already had considerable exploration success. As I have demonstrated above, Ariana is now entering an exciting stage of its development, and the coming year will see the pace of these activities maintained. We offer our sincere thanks to our loyal shareholders who have continued to support us through a challenging period. In recognition of this support, we are offering all shareholders the opportunity to subscribe for one warrant for every five shares currently held. I want also to express the gratitude of the Board for the sterling efforts of our exploration and administrative teams in Turkey. They have borne the brunt of our cost-cutting measures, and their enthusiastic dedication to achieving successful outcomes for our Company is a source of great pride for us. Finally, I thank my fellow Board members for their tireless support, encouragement and wise advice. Michael Spriggs Chairman 29 May 2009 BUSINESS REVIEW SUMMARY Ariana has made solid progress during the year and made the transition from exploration to mine development. At the same time, the Company has continued to develop its regional strategy in western Turkey, and is enhancing its resource growth opportunities through focused exploration and acquisition in the region. Further drilling has been undertaken at the Sindirgi Project, resulting in a revised JORC compliant resource at Kiziltepe of 186,000 oz gold-equivalent. A JORC-compliant resource was also established on the Tavsan Project of 215,000 oz gold-equivalent. Meanwhile, the Joint Venture with European Goldfields Limited has identified new targets at the Ardala Project in eastern Turkey, which are scheduled to be drilled in 2009. Post year end, the Company completed a placing for £500,000 in January in which European Goldfields Limited maintained their position in Ariana at approximately 20%. The Company also finalised a trial processing agreement with Eti Gümüs A.S. in March: the agreement entails a large scale metallurgical test of ore delivered from a trial mine at Kiziltepe. Ariana's resource inventory now contains 401,000 ounces gold equivalent, of which approximately 342,000 ounces are gold. This figure represents an increase of almost 35% in our resource base since last year, which was achieved through additional drilling at Kiziltepe and a revised geological model at Tavsan. CORE PROJECT AREA The Company dedicates its effort to the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey. This province hosts three operating gold mines (total reserves of about 7 Moz) and remains highly prospective for large epithermal and porphyry deposits. The Company considers the exploration and development risk in this region to be low due to excellent infrastructure and established gold mining operations. Ariana is developing two core projects within the WAVE Province, Sindirgi and Tavsan, in addition to exploring several other advanced project areas including Ivrindi, Demirci and Muratdag. The region surrounding these projects is named the WAVE Project Area, with our base of operations in Sindirgi located strategically at its core. The Company is targeting the development of one or more of its core projects as environmentally friendly small-footprint mines in the coming years. Other exploration projects will be joint-ventured or sold to ensure focus is maintained on the further exploration and development of the Sindirgi and Tavsan projects. In addition to containing our advanced projects, the Project Area encompasses the majority of our exploration tenements in western Turkey. Excluding tenements held for core or advanced projects, 32 exploration licences in this area have been optioned to European Goldfields Limited for one year. Ariana is targeting a resource of 1Moz of gold within the WAVE Project Area and our strategy is designed to build steadily on our existing resource base in the region via exploration and future acquisitions. New exploration opportunities are being evaluated on an ongoing basis to further enhance the early-stage value of the project pipeline. SINDIRGI PROJECT The Sindirgi Gold Project ("Sindirgi") lies 130km northeast of the coastal city of Izmir and 130km west of the Gümüsköy silver plant. Sindirgi was acquired in early 2005 from Newmont for US$400,000, with a royalty of up to 2.5% on future gold production from the project since assigned to Franco-Nevada Corporation. Current JORC resources stand at 186,000 ounces gold equivalent (Table 1). The project encompasses an important regional trend of epithermal gold mineralisation, known as the Sindirgi Gold Corridor, which contains four distinct prospects: Kiziltepe, Kepez, Karakavak and Kizilçukur. To date, a total of 45km of veins have been identified in outcrop on the project. Since January 2008, 3,020m of diamond-drilling has been completed on the Kiziltepe deposit. Table 1: JORC resource statement for Kiziltepe. Classification Vein Tonnage Grade Grade Au (oz) Ag (oz) Au (Kt) Au Ag equivalent (g/t) (g/t) (oz) Measured Arzu 390 6.4 101 80,257 1,266,559 105,588 South Indicated Arzu 110 5.7 106 20,161 374,920 27,659 South Arzu 50 2.3 38 3,698 61,093 4,920 North Inferred Arzu 100 2.2 29 7,074 93,248 8,939 North Banu 130 2.6 82 10,868 342,765 17,723 Derya 170 2.9 53 15,852 289,711 21,646 Total 137,910 2,428,296 186,476 Au equivalent (oz) is the sum of the gold ounces and the gold equivalent ounces of silver based on a gold/silver price ratio of approximately 50:1. Kiziltepe Deposit The Kiziltepe deposit contains 20km of outcropping low-sulphidation epithermal quartz veins, which are hosted by dacitic volcanic units of Miocene age. The vein field occurs in an area covering approximately 3km by 1km and is well serviced by asphalt road and forestry tracks. Individual veins are exposed at surface for 750m in strike length and are between 1m and 14m wide. Four of these vein systems were drilled during the year. A revised JORC-compliant mineral resource was provided by SRK UK Ltd ("SRK") based on drilling results for both the southern and northern sections of the Arzu vein system and for several additional veins. The mineral resource was established to a depth of 125m from surface, at a cut-off grade of 2 g/t Au (Table 1). An agreement with Eti Gümüs A.S. for trial processing of 5,000 tonnes of ore was concluded following successful initial bulk metallurgical testwork undertaken at their Gümüsköy plant, for which recoveries of 82.3% and 89.7% were achieved. Trial mining operations at Kiziltepe have been completed and 5,177 dry tonnes of ore has been delivered to the plant for processing. Arzu Vein The northwest-trending and steeply northeast dipping Arzu Vein system comprises two sections: Arzu South and Arzu North. These two sections are separated over a strike length of 650m by silicified and clay altered rhyodacitic ignimbrite cover rocks, which obscure the vein system beneath. Drill-testing of this covered area has been planned on the basis of several positive drilling results in the periphery of the covered area, and the identification of buried geophysical targets in 2008. Arzu South The Arzu South vein system has a strike length of 650m. A segmented and partially overlapping vein array has been modelled for Arzu South, with veins typically 5m wide. During the year, drilling results obtained from the southern extension of the Arzu South vein included gold-equivalent intersections of 23.25 g/t over 6.9m, 11.99 g/t over 7.3m and 9.07 g/t over 9.4m. These results demonstrate the potential for further resource growth in the southern part of the vein, where several plunging shoots of high grade mineralisation have been modelled. A mining options study undertaken on the Arzu South vein by Wardrop Engineering ("Wardrop") evaluated several different mining and processing scenarios, from which open-pit operations were considered preferable. The study utilised resource inputs from SRK, metallurgical results from SGS Lakefield Research Limited and Gekko Systems Pty. Ltd., and certain Turkish cost estimates. The Wardrop study considered an open pit production rate of 125,000 tonnes per annum, with a cut-off grade of 1.3 to 2.0 g/t and mine life of 4 to 3 years, depending on gold price scenarios of US$900 or US$600 per ounce respectively. Following this study, it was determined that the most viable route to production in the short-term was via off-take or toll-treatment using an existing processing facility. The agreement with Eti Gümüs A.S. has now established a basis for production from the Arzu South vein. Arzu North The Arzu North vein system has a strike length of 400m. The vein system is atypical of veins developed elsewhere on the Kiziltepe deposit, comprising multiple parallel veins, intervals of stockwork veins and extensive wall-rock alteration. Whilst there is only one important vein at this location, the hangingwall contains at least three subsidiary veins that can be traced on surface and in drill core. The Arzu North system is interpreted to represent the terminal splay of the NW-trending structure that hosts the high-grade gold mineralisation at Arzu South. In 2008, drilling results from Arzu North included gold equivalent intersections of 11.99 g/t over 6.1m, 5.04 g/t over 6.25m and 2.83 g/t over 10.6m. Approximately 2,000 tonnes of low grade (~2 g/t Au) ore from this location have been stockpiled on site in accordance with Turkish mining regulations. Other Veins Exploratory drilling has been completed on six additional veins at the Kiziltepe prospect. This work provided results which were sufficiently encouraging to warrant follow up drilling on three of these veins and led to resource estimates at Banu and Derya. Derya Vein The Derya Vein has a strike length of 500m and contains grades up to 6.3 g/t Au and 486 g/t Ag in drilling. There is a marked increase in gold and silver grade in the eastern extension of the vein towards the rhyodacitic ignimbrite cover rocks in the Arzu North area. It is apparent that Derya may be a splay from the Arzu vein system, with gold and silver grades improving toward the intersection of the two structures. In drilling, gold-equivalent intersections of 6.22 g/t over 6.0m, 3.85 g/t over 8.7m and 5.79 g/t over 3.0m have been recorded in proximity to the Arzu structure. Banu Vein The Banu Vein has a strike length of 750m and has the most uniform grade at surface of all the veins at the Kiziltepe deposit. For 550m of surface sampled strike length, the vein carries a fairly consistent grade of approximately 2-3 g/t Au over a true average width of 2.5m. Evidence from both new and previous drilling indicates an improvement in grade at depth and along strike to the southeast. Seven RC drill holes on a 300m section of vein provided best gold-equivalent intercepts of 3.81 g/t over 6m, 3.78 g/t over 5m and 2.58 g/t over 7m. Kepez Prospect The Kepez prospect lies 6.5km north-east of the Kiziltepe deposit and is located within the same ten-year operating licence. Kepez hosts over 2.5km in strike length of gold silver bearing low-sulphidation epithermal quartz veins, across an area of at least 2km by 1km. Individual veins are exposed for up to 850m and widths vary between 1m and 25m. The main structure, named the Karakaya Vein, trends northward, dips to the west at 50 degrees and is hosted along the contact between Miocene age dacitic volcanic rocks and Cretaceous ophiolites. Previous sampling undertaken on the Karakaya Vein returned up to 8.68 g/t Au over 16m and 6.28 g/t Au over 11m across and along the hangingwall contact of the vein, yet follow up drilling results were disappointing with the best intersect recorded in historical drilling: 6.9 g/t Au over 4m. Following agreement with Eti Gümüs A.S. on Kiziltepe, the observed mineralisation at the Karakaya Vein required re-evaluation as a potential source of high-grade ore for the Gümüsköy processing plant. The prospect is scheduled to be drilled with the objective of establishing a small surface resource. Table 2: JORC resource statement for Tavsan. Classification Zone Tonnage Grade Grade Au (oz) Ag (oz) Au (Kt) Au Ag equivalent (g/t) (g/t) (oz) Indicated Main 1,700 1.6 4.2 87,460 229,582 92,051 Inferred Main & 1,300 1.0 3.6 41,801 150,482 44,810 Sivri Inferred Satellite 1,900 1.2 3.7 73,312 226,045 77,833 Total 202,572 606,109 214,695 Au equivalent (oz) is the sum of the gold ounces and the gold equivalent ounces of silver based on a gold/silver price ratio of approximately 50:1. TAVSAN PROJECT The Tavsan Gold Project ("Tavsan") lies 75km from the Sindirgi Project, 210km northeast of the coastal city of Izmir and 55km west of the Gümüsköy silver mine. A definitive agreement to purchase the Tavsan Project from Odyssey Resources was finalised in May 2008. The agreement involved payment of US$500,000 and 3,000,000 shares in the Company at 5p per share, with a retained royalty of up to 2% on future gold production from the project assigned to Teck Cominco. Current JORC compliant resources stand at 215,000 ounces gold equivalent (Table 2). The project is located within an important regional trend of epithermal gold mineralisation, known as the Dagardi Antimony Province. The Tavsan project itself contains three distinct gold prospects: Tavsan, Evciler and Çaldibi. A total of 8km of gold mineralised jasperoid has been identified in outcrop on the project. Tavsan Prospect The Tavsan prospect contains 4km of outcropping gold mineralised jasperoid, which is located along a low-angle thrust fault separating underlying Jurassic limestone from overlying Late Cretaceous ophiolitic rocks. The outcropping jasperoid occurs in an area covering approximately 4km by 4km and is well serviced by asphalt road and forestry tracks. Individual segments of jasperoid are exposed at surface for 500m and are up to 20m thick. Due to the relatively gently dipping nature of the jasperoid, much of the mineralisation is potentially open-pittable. Although a formal scoping study was not initiated in 2008, certain steps were taken to improve understanding of the project, including a revised resource estimate, heap-leach testwork and a preliminary economic model. Due to the simplicity of the project and acceptable metallurgical recoveries reported in column-leach testwork, the Company considers merit in its development as a heap-leach operation capable of delivering 30,000 ounces per annum. The Company envisages production at a rate of 1Mt per annum via the development of a linked series of shallow pits across the prospect. The Company is presently considering its options for the further development of the Tavsan prospect. JOINT VENTURE EXPLORATION Reconnaissance exploration in eastern Turkey for large porphyry Cu-Au and related deposits identified potential in north-eastern Turkey and resulted in the acquisition of the Ardala Project by the Company. This project, in addition to several other licences, is now being advanced through a Joint Venture agreement with European Goldfields Limited. A Joint Venture exploration company, 49% owned by Ariana Resources and named Pontid Madencilik San. ve Tic. Ltd., was established in May 2008. The Joint Venture includes a free-carry to Bankable Feasibility at 20% or 10%, for initial projects or new projects, respectively. Meanwhile, an earlier Memorandum of Understanding with Besler Insaat Turizm ve Madencilik San. ve Tic. Ltd. to explore certain licences in south-eastern Turkey was cancelled in early 2008 following initial reconnaissance. Ardala Project The Ardala Prospect is located in the Pontide Metallogenic Province of Turkey and lies approximately 80km southeast of the coastal city of Hopa and 20km east of Artvin. The prospect was acquired according to a royalty agreement for which a 1.5% NSR will be payable in the event that the project enters production. The prospect hosts a porphyry copper-gold (plus molybdenum) mineralised system associated with a series of nested quartz diorite intrusions of Eocene age within an Upper Cretaceous volcano-sedimentary sequence. Exposed parts of the porphyry have dimensions of 600 by 700m and interpretation of ground magnetic data suggests further lateral continuity beneath limestone units. Twenty-nine drill holes were undertaken on part of the mineralised system in the early 1990's for which an outline (non-JORC) resource of 20Mt at an average grade of 0.25 % Cu, 0.45 g/t Au and 65 ppm Mo was established. Surrounding gold-bearing skarns, with a peak grade of 5.16 g/t Au and 0.2% Cu in rock-chips, remain undrilled. In 2008, a major new soil anomaly, named the Salinbas Target, was discovered on the property, to the south-west of the area drilled by previous operators. Rock-chip samples taken from this area included 16.4 and 18.4 g/t Au in gossaniferous breccia, and 1.92 g/t Au in porphyry and 0.4 g/t Au in skarn. The Salinbas Target is just over 1km from the area drilled in the 1990s and has a strike of about 1km and width of 0.3km. An additional licence was secured in this area to cover the Salinbas Target and drilling is scheduled on this and other targets during 2009. OUTLOOK 2008 was a busy and successful year for the Company, which saw the acquisition of the Tavsan Project, the initiation of a Joint Venture with European Goldfields, and the further development of Kiziltepe to enable trial mining to commence in early 2009. The Company is expecting to receive first cashflow from Kiziltepe in the near future, laying the foundations for another promising year of growth for Ariana Resources. Dr. Kerim Sener Managing Director 29 May 2009 Summarised Consolidated Income Statement For the year ended 31 December 2008 2008 2007 £,000 £,000 Administrative costs (608) (516) Investment income 29 65 Share of loss of associate (25) - Loss before tax (604) (451) Tax - - Loss for the year attributable to equity shareholders of the company (604) (451) Earnings per share: Basic and diluted loss per share (pence) 0.71 0.84 Summarised Consolidated Balance Sheet For the year ended 31 December 2008 31 December 31 December 2008 2007 £,000 £,000 ASSETS Non-current assets Trade and other receivables 126 124 Intangible assets 3,401 2,082 Land, property, plant and equipment 230 45 Interest in associates - - Total non-current assets 3,757 2,251 Current assets Trade and other receivables 302 179 Cash and cash equivalents 143 1,182 Total current assets 445 1,361 TOTAL ASSETS 4,202 3,612 EQUITY Called up share capital 927 713 Share premium 4,282 3,419 Other reserves 720 720 Share options 100 7 Translation reserve 63 38 Retained earnings (2,046) (1,442) Total equity 4,046 3,455 LIABILITIES Current liabilities Trade and other payables 156 157 Total current liabilities 156 157 TOTAL EQUITY AND LIABILITIES 4,202 3,612 Summarised Consolidated Statement of Changes in Equity For the year ended 31 December 2008 Share Share Other Share Translation Retained capital premium reserves options reserve earnings Total £,000 £,000 £,000 £,000 £,000 £,000 £,000 Changes in equity to 31 December 2007 Balance at 1 January 2007 470 2,738 720 7 (11) (991) 2,933 Loss for the year - - - - - (451) (451) Total recognised income and expenditure for the year - - - - - (451) (451) Foreign currency translation differences - - - - 49 - 49 Issue of share capital 243 729 - - - - 972 Expenses offset against share premium - (48) - - - - (48) Balance at 31 December 2007 713 3,419 720 7 38 (1,442) 3,455 Changes in equity to 31 December 2008 Loss for the year - - - - - (604) (604) Total recognised income and expenditure for the year - - - - - (604) (604) Foreign currency translation differences - - - - 25 - 25 Share based payments - - - 93 - - 93 Issue of share capital 214 863 - - - - 1,077 Balance at 31 December 2008 927 4,282 720 100 63 (2,046) 4,046 Summarised Consolidated Cash Flow Statement For the year ended 31 December 2008 A 2008 2007 £,000 £,000 Cash flows from operating activities Cash generated from operations (613) (548) Net cash outflow from operations (613) (548) Cash flows from investing activities Purchase of land, property, plant and equipment (231) (25) Payments for intangible assets (1,125) (770) Purchase of an interest in associates (25) - Interest received 28 54 Net cash used in investing activities (1,353) (741) Cash flows from financing activities Proceeds from issue of share capital 927 924 Net cash proceeds from financing activities 927 924 Net decrease in cash and cash equivalents (1,039) (365) Cash and cash equivalents at beginning of year 1,182 1,547 Cash and cash equivalents at end of year 143 1,182 Principal accounting policies This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Group and under the historical cost convention. 1. Basis of preparation The Group consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, effective for the Group's reporting for the year ended 31 December 2008. The separate financial statements of the Company are presented as required by the Companies Act 1985. These financial statements have been prepared under the historical cost convention, and the accounting policies have been applied consistently throughout the Group. These financial statements have also been prepared on the going concern basis, further details of which are set out in note 4. 2. Loss per share The calculation of basic loss per share is based on the loss attributable to ordinary shareholders of £604,000 (2007: £451,000) divided by the weighted average number of shares issued during the year 85,067,170 (2007: 53,488,941) in issue. There is no dilutive effect of share options or warrants on the basic loss per share. 3. Events after the balance sheet date On the 14 January 2009 the Company finalised a placement of 50,000,000 new ordinary shares for £500,000 (gross of share issue costs) and issued 12,300,000 warrants to buy ordinary shares at 1 pence valid for a four year period. 4. Going concern The financial position of Ariana, its cash flows and liquidity are described in the summary accounts. The current economic conditions provide challenges to the board and it is their prime responsibility to ensure the Company remains a going concern. A placing in January 2009 raised £500,000 (gross of share issue costs) and cash-flow from trial mining is expected in 2009. In the later part of 2008 and in quarter one 2009 the Company took measures to reduce its overheads. The directors are aware that the Group will need to raise additional working capital during 2009 to support corporate overheads and exploration programmes, and to maintain the Company as a going concern. The Company is also considering other options, including the sale of assets to raise finance. Although Ariana has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. However, the directors have a reasonable expectation that they will secure additional funding when required to continue operating for the foreseeable future. For this reason, the directors continue to adopt the going concern basis in preparing the financial statements. 5. Summary accounts The summary accounts set out above do not constitute statutory accounts as defined by Section 240 of the UK Companies Act 1985. The summarised consolidated balance sheet at 31 December 2008 and the summarised consolidated income statement, summarised consolidated statement of changes in equity and the summarised consolidated cash flow statement for the year then ended have been extracted from the Group's 2008 audited statutory financial statements. The auditor's report on the statutory financial statements for the year ended 31 December 2008 was unqualified and did not contain any statement under Section 237(2) or (3) of the Companies Act 1985. This announcement includes extracts from the audited statutory accounts for the year to 31 December 2008 upon which the auditors' opinion is modified on the basis of an emphasis of matter opinion and going concern. The comparative figures relating to the year to 31 December 2007 are taken from the audited statutory accounts for that year. 6. Annual Report The Annual Report for the year ended 31 December 2008 will be posted to shareholders shortly. The Annual General Meeting of the Company will be held at The East India Club, 16 St James's Square, London, SW1Y 4LH on 29 June 2009 at 12.00 noon. ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.