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Parent firm of Cyprus mining company posts £5 million profit

copper

Ariana Resources, the AIM-listed mineral exploration and development company with mining interests in both Cyprus and elsewhere in Europe, this week released its financial results for 2022, posting a pre-tax profit of £5 million.

In Cyprus, Ariana is working with Venus Minerals to develop near-term and advanced copper-gold projects.

Ariana has a 58 per cent stake in Venus Minerals. It has stated that it is working with its partners at Semarang Enterprises on an IPO for Venus.

The company’s Magellan Project contains some 17 million tonnes at 0.45-1.10 per cent copper with associated gold.

“Our investment in Venus is significant given the scale of the impending world copper supply deficit against rising demand for copper used in alternative energy production,” the company stated.

Regarding the results for 2022, the company, which has been able to achieve profitability since 2016, said that figures point toward its “self-sustaining, cash-positive, debt-free business model, which allows Ariana to leverage its strengths to grow its business”.

“The Consolidated Statement of Comprehensive Income sets out our very satisfactory results for the year, reflecting the success of the group on a number of fronts,” Ariana Resources Kerim Sener Managing Director said.

“Overall the group has recorded a profit before tax for the year to December 2022 of £5.0m. This was £2.7m less than 2021, albeit that year benefited from the profit of £6.4m on the part disposal of our Turkish interests,” he added.

Moreover, Sener said that administrative costs increased only marginally on the prior year, though as explained in a specific note, the company benefited from an exchange gain of £2.8m arising on its US dollar cash balances this year, resulting in a reduction to £0.6m as reported in the statement.

Otherwise, the managing director continued, the principal driver of the company’s performance has been the increase in its net share of the profit and losses of its associated investments, which increased by £1.5m over the prior year.

“Once again the decline in value of the Turkish Lira has meant that we are showing an accounting loss through Other Comprehensive Income primarily on the translation of the opening balances of our overseas subsidiaries at closing rates of exchange,” Sener said.

“These losses are not realised unless we divest ourselves of such assets,” he added.

Moreover, Sener explained that the Consolidated Statement of Financial Position reflects the increase in the value of the company’s share of its associates, up from £11.4m to £15.3m in 2022.

“The main change was in the value of Zenit, in part reflecting the fact there was no dividend received this year, as funds were directed at developing Tavşan,” he said.

“Another major change this year is the decline in cash balances from £16.4m to £9.4m, comprising dividends paid by the Company to shareholders amounting to £4m during the year as part of the special dividend arising on last year’s part disposal of our interests, and also an increase in tax payable in Turkey of £1.9m due to corporation tax changing to becoming payable in advance there,” he added.

A final point worthy of note, Sener explained, is the transfer of £7.2m from the Capital Reduction Reserve to boost Retained Earnings, and facilitate dividend payments in future years.

“Overall the Group has made great progress and the financial results reflect that performance, and our strong financial position gives us the platform to continue our development at pace,” he concluded.

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