Oriel Resources plc

Oriel Resources plc

August 29, 2007 12:24 ET

Oriel Resources Plc Interim Results for the Period Ended 30 June 2007

Oriel Becomes Ferrochrome Producer

LONDON, UNITED KINGDOM--(Marketwire - Aug. 29, 2007) - Oriel Resources plc (TSX:ORL)(AIM:ORI)("Oriel", or the "Company"), the London-based chrome and nickel mining and processing company, announces its interim results for the period ended 30 June 2007.

All amounts are presented in US dollars, unless otherwise stated.


- Oriel completes a private placement raising approximately $96 million (C$104 million) by the issue of 80,000,000 ordinary shares at a price of 61 pence (approximately C$1.30) per share

- Commencement of high carbon ferrochrome ("HC FeCr") production at the Tikhvin ferrochrome smelter, Russia ("Tikhvin")

- Project Finance magazine presents the European Mining deal of the Year 2006 award to Oriel for the Voskhod chrome project ("Voskhod") for the debt financing deal completed in December 2006

Post Period:

- Commissioning of Tikhvin's second HC FeCr furnace

- Drawdown of $40 million from the $120 million loan facility for the further development of Voskhod

- Oriel generates initial production revenue from first sales of Tikhvin's HC FeCr product

- Oriel completes long term off take contract with Glencore International AG ("Glencore") to market a significant proportion of Voskhod's annual 900,000t of beneficiated chromite ore product, commencing Q3 2008

Executive Chairman, Dr Sergey V Kurzin commented:

"I am pleased with the progress made at Oriel's chrome and nickel mining and processing projects during the first half of 2007. We are especially pleased with the recent commencement of HC FeCr production at the Tikhvin plant in Russia and the subsequent product sales and cash generation.

"The completion of a $96 million private share placement and the drawn down of an initial tranche of $40 million from Voskhod's $120 million loan facility will enable Oriel to continue with the commissioning of the remaining two furnaces at Tikhvin smelting plant and allow the Company to progress the Shevchenko nickel project.

"With continuing good progress in the construction of the plant infrastructure and the underground development at Voskhod, the Company remains on target to commence production in Q3 2008. I am also happy to report that Oriel has successfully secured a long-term offtake agreement with Glencore for a considerable proportion of Voskhod's chrome ore."

Notes to Editors:

Oriel Resources was formed in July 2003 with Dr Sergey V. Kurzin as Executive Chairman and CEO and is a London-based chrome and nickel mining and processing company with its Ordinary Shares and Warrants admitted to trading on London's Alternative Investment Market (AIM) and its Ordinary Shares listed on the Toronto Stock Exchange.

The Company's primary focus is on the identification, acquisition, exploration and development of advanced chrome, nickel, and other alloying opportunities in the countries of the FSU, including The Republic of Kazakhstan and The Russian Federation. The Oriel group currently has three projects, namely the Tikhvin ferrochrome smelter project, Russia, the Voskhod chrome project and the Shevchenko nickel project, both situated in north-western Kazakhstan. Following the results of recent feasibility studies for the Russia and Kazakh-based projects and given the current high demand for chrome and nickel products, the directors are fast-tracking the Voskhod chrome project into production while further developing the Shevchenko nickel project. The Tikhvin ferrochrome smelter project near St Petersburg, Russia commenced operations in April 2007.

Oriel Resources plc

Interim Report for the six months ended 30 June 2007

Executive Chairman's Statement

I am pleased to present Oriel Resources plc's half year financial results for the first six months ended 30 June 2007.

The development of Oriel's chrome and nickel mining and processing projects during the first half of 2007 continued to move the company towards its goal of becoming a premier, integrated supplier to the stainless steel industry. Period and post period highlights include Tikhvin's commencement of HC FeCr production and subsequent HC FeCr product sales, completion of a $96 million private share placement, drawdown of the first $40 million from Voskhod's $120 million loan facility, signing of a chrome ore off take agreement with Glencore for Voskhod chrome ore and continuing progress being made at the Voskhod mine and beneficiation plant.

High carbon ferrochrome production

Subsequent to initial production at Tikhvin during April, I am very pleased to report that Oriel commenced ferrochrome sales in July, thus generating the Company's first production revenue. Tikhvin's initial batch of saleable HC FeCr product was sold at approximately $1.30 per pound Cr and will continue to be sold on the spot market.

Regrettably, due to recent mine strikes in Albania and logistical delays in Turkey, interruptions in the delivery of imported beneficiated chrome ore to Tikhvin have delayed the commissioning of furnace No.2 and briefly suspended the operations of furnace No.1. Since the resumption of ore deliveries in mid July 2007, operations at furnace No.1 have now been re-started and furnace No.2 was successfully commissioned early August 2007. Imported chrome ore will feed the Tikhvin smelter complex through 2007 until 3rd Quarter 2008, when production from our Voskhod mine is due to commence and vertical integration is realised.

Work continues to commission the remaining two furnaces which, once fully operational, will enable the plant to reach its planned production capacity of 148,000 tonnes per annum (tpa) HC FeCr.

Private Placement

June's successful completion of a private share placement at Pounds Sterling 0.61 (approximately C$1.30) raised $96 million (approximately C$104 million) for use as general working capital and for the costing, evaluation and assessment of preliminary engineering design for additional ferrochrome production. In addition, the funds will be used to further progress the development of the Shevchenko nickel project.

Voskhod Mine Development

December 2006's reverse takeover was an extremely positive move for the Company, enabling Oriel to move a step closer towards vertical integration. With construction and underground development on-going at Voskhod, the project is on target to commence production during 3rd Quarter 2008 and to supply its first ore to the Tikhvin ferrochrome plant, Russia. Imported chrome ore will feed Tikhvin until production at Voskhod commences. Thereafter, Tikhvin's demand for beneficiated chrome ore will be satisfied by approximately one-third of Voskhod's planned annual production of over 900,000t.

In July 2007, Oriel completed a long term off take contract with Glencore to market a significant proportion of Voskhod's annual 900,000t of beneficiated chrome ore product. In addition to the satisfactory progress in Voskhod's underground development, I am happy to report that construction of the beneficiation plant and infrastructure facilities have now reached an advanced stage.

In June 2007, to fund the further mine development, Oriel has drawn down an initial tranche of $40 million from Eurasian Development Bank's ("EDB") $60 million share of Voskhod's $120 million loan facility which was arranged in December 2006 with EDB, Bayerische Hypo- und Vereinsbank AG ("HVB") and WestLB AG.

As well as continuing the development of Voskhod and Tikhvin, Oriel's management is aggressively evaluating the optimum process and economic options to develop the Shevchenko nickel project. Discussions are on-going with engineering and financial advisers and a decision on chosen technology, scale and a development time-line will be made during 3rd Quarter 2007.

The Company's satisfactory cash position, the commencement of ferrochrome production and subsequent sales are important factors, amongst others, which will be used to expedite the development of the Shevchenko nickel project and allow Oriel more options for further participation in the ferroalloy and stainless steel industries. We believe the success of our expansion and formation of new partnerships reflects the confidence shown not only in Oriel's projects and management, but also in Kazakhstan, with its political stability, emerging economy and its vast base of natural resources.


According to a 2nd Quarter 2007 report from leading market analyst International Stainless Steel Forum, the overall, long-term outlook for the global stainless steel market remains encouraging with crude steel production in 2007 set to rise to a record 29.8Mt from the 2006 figure of 28.4Mt.

In the short-term, market expert, Heinz H Pariser Alloy Metals & Steel Market Research ("Pariser"), reported that while the stainless market had remained on a high level during the 1st Quarter of 2007, the extraordinarily high nickel price changed the stainless steel market environment, leading to temporary demand cutbacks, causing nickel price reductions of some 30% from the May highs of $54,000 per tonne. In addition, and in response to the recent high nickel price, there has been an increased growth in ferritic grades of stainless steel and low Ni CrMn stainless grades are becoming more acceptable to various parts of the stainless industry, indicating long-term record high nickel prices cannot be upheld. However, most importantly chrome is required for all these grades of stainless steel and demand for ferrochrome in the medium to long term will remain strong. London Metal Exchange values for nickel are expected to settle at approximately $30,000 per tonne by the end of 2007, with forecasters seeing stabilisation during the 1st Quarter 2008 as demand begins to return.

The chrome in high carbon ferrochrome price has risen approximately 106% since the start of the year. As an indication of the high demand for this product Glencore signed a contract in July to purchase Tikhvin's initial HC FeCr production at a price of $1.30 per lb chrome.

China will continue to be the driving force behind the surge in stainless steel demand and is continuing to expand its stainless steel melting activities with significant new capacity being added. Although we have seen volatility in the financial and commodity markets, the underlying demand for our products remains strong and we remain positive about the outlook for the global economy and our markets. The location of Oriel's ferrochrome, chrome and nickel projects in Russia and Kazakhstan will enable the Company to take full advantage of Asia and Europe's stainless steel demands.

With our projects' strategic locations and Oriel's aggressive management approach to the advancement of these projects, we expect to be well positioned to deliver strong returns for our shareholders by developing our assets and expanding our activities. Not only is management working extremely hard to reach full production capacity at Tikhvin as soon as possible, but firmly believes the Company will be able to bring the Voskhod project online as one of the world's lowest cost, high quality chrome operations and in a short period of time.

Finally, I would like to extend a warm welcome to Randy Reichert, who joined Oriel as Chief Operating Officer (COO) in August. Randy's five years' on-the-ground experience with Bema Gold managing their Russian-based Kupol and Julietta gold projects will prove invaluable. As COO, Randy will be responsible for organising, controlling and supervising Oriel's producing and operating assets.

Dr Sergey V Kurzin
Executive Chairman
29 August 2007

Review of Operations

The aggressive and continued development of Oriel's 100% owned Tikhvin and Voskhod operations remained management's most important undertaking during the first six months of 2007. June's private placement agreement ($96 million) and July's first drawdown ($40 million) of the debt facility related to the Voskhod project provided the Company with the cash resources to progress with the development of the Voskhod, Tikhvin and Shevchenko projects.

Voskhod Chrome Project, Kazakhstan

An important aspect of Oriel's bid to achieve vertical integration is that of the successful implementation of the Voskhod chrome project, Kazakhstan. The first six months of 2007 saw considerable progress being made at Voskhod with underground development and plant construction contractors appointed and site establishment well advanced.

In July 2007, Oriel completed a long term off take contract with Glencore to market a significant proportion of Voskhod's annual 900,000t of beneficiated chromite ore product, commencing Q3 2008.

To fund the further development of Voskhod, Oriel completed in July, a drawdown of $40 million from a $120 million loan Facility. This Facility was arranged in December 2006 with EDB, HVB and WestLB. In recognition of the achievement, Oriel was awarded the European Mining Deal of the Year 2006 by Project Finance magazine for the Voskhod project's debt funding deal.

The Voskhod chrome project is located within the Khromtau District of the Aktobe Region, north west Kazakhstan. A tarmac road links the town of Khromtau with Aktobe, the regional administration centre, 110km to the west. The project lies 7km NNE of Khromtau and is surrounded by a group of existing and exploited mines. Kazchrome Donskoy, the largest chrome mine in the world, lies 3km north of Voskhod.

Key Project Information

- Planned annual production of over 900,000t of beneficiated chrome ore

- Voskhod's chrome ore is of very high grade; typically up to 48% Cr2O3 with up to 57% Cr2O3 grade concentrate anticipated to be readily produced

- Voskhod maintains a long mine life of 14 years

- Extension to the Voskhod contract licence area awarded, which includes the Karaagash deposit which has Soviet C2 and P1 classified resources. Drilling is presently underway so resources may be reported to Ni 43-101 standards in due course

- Project economics are based on a beneficiated chrome ore price of $145 per tonne with a current prices of approximately $420 to $450 per tonne being reported for similar quality material

- NI 43-101 & JORC Indicated resources of 19.51Mt @48.47% Cr2O3 and inferred resources of 1.57Mt @ 41.05% Cr2O3

- Pariser carried out an updated study of the chrome ore market. Pariser provided a positive outlook for chrome ore demand and a 10 year price forecast of between $154 to $224 (average $183) per tonne (free at the Kazakhstan/Russian border) for a 48% Cr2O3 Kazakhstan ore

Significant advances have been realised in the development of the Voskhod mine, plant and general infrastructure. Since commencement of work in late 2006, the following mine site development has taken place:

- Mining contractor (Central Asia Mining) has completed the development of the 185m long box cut and mine portal, the standing of steel support arches within the box cut and is currently establishing the intake ventilation system

- Construction of the primary ventilation shaft has commenced with the fore shaft having been sunk to a depth of 22m and concrete lined. Foundations have been poured for a winder base and head frame

- Development of the decline face has reached 250m from the surface portal, of which 65 metres has been completed in hard rock using roof bolts and shotcrete support

- Site infrastructure required for the construction and initial mine development has been installed including temporary power, roads, temporary offices, fuel tank farm and batching plant

- Earthworks for the plant building, tailings dam, railhead and railhead access road is in progress

- Delivery of equipment for the installation of a 25Mw permanent power supply has commenced with construction due to begin in July

- Satellite communications system installed

- Permanent explosives magazine is under construction

- Main personnel camp in the nearby town of Khromtau have been up-graded to accommodate 100 people

Once in production, approximately one-third of Voskhod's 900,000t of beneficiated chrome ore production is destined for Oriel's Tikhvin ferrochrome smelter in Russia, leaving two-thirds of Voskhod's production for sale to other consumers. The excellent quality of the Voskhod chrome ore is confirmed by the high level of interest in off-take demand. Heinz Pariser's extremely positive market report shows growing ore demand especially in Asia which, in conjunction with Oriel's initial negotiations with potential off-takers substantially exceeded the mine's initial average production.

Tikhvin Ferrochrome Smelter, Russia

Since Oriel's acquisition in November 2006 of the Tikhvin ferrochrome smelting plant, the Company has worked hard to progress with the first of two stages of plant commissioning.

At acquisition, residual stage one works within Tikhvin included the commissioning of furnaces No.1 and No.2 and completing construction of the gas cleaning plants, batching and smelting shops, slag treatment site and general infrastructure.

The successful commissioning of furnaces No.1 in April and No.2 in August 2007 is not only testament to the hard work and dedication of the entire Tikhvin team, but was a significant step for the Company toward becoming an integrated supplier to the stainless steel industry. Oriel generated its first production revenue from sales of high carbon ferrochrome (HCFeCr) in July 2007. Tikhvin's initial batch of saleable HC FeCr product was sold at a spot price of $1.30 per pound chrome to Glencore

Due to recent mine strikes in Albania and logistical delays in Turkey, interruptions in the delivery of imported beneficiated chrome ore to Tikhvin delayed the commissioning of furnace No.2 and briefly suspended the operations of furnace No.1. Since the resumption of ore deliveries in mid July 2007, smelting operations have re-started at furnace No.1, while furnace No.2 was successfully commissioned in early August, 2007. Imported chrome ore will feed the Tikhvin smelter complex through 2007 until Q3 2008, when it will be replaced by Voskhod ore once Kazakhstan production commences. Work continues to commission the remaining two furnaces which, once fully operational, will enable the plant to reach planned stage one production capacity of 148,000 tpa HC FeCr.

The Tikhvin smelter is located within the town of Tikhvin, some 200km south east of St Petersburg, Russia. Situated within an industrialised zone on the outskirts of the town, the site has immediate access to road and rail transport. Each of the four furnaces will operate on a combination of lumpy and fine ores, with coke as a reductant and quartzite as flux.

Key Project Information

- Acquired from IPH Polychrom Holdings B.V. in November 2006
- High carbon ferrochrome production commenced April 2007
- Initial batch of saleable HC FeCr product sold in July 2007 at
approximately $1.30 per pound, representing Oriel's first revenue from
current working projects
- Tikhvin is being commissioned in two phases;
- Phase I: HC FeCr production capacity of 148,000 tpa commenced during
2007; and
- Phase II: HC FeCr production capacity of 180,000 tpa commencing 2011
- The plant comprises four (4) semi-closed submerged arc AC furnaces with
full production capacity of 22.5MVA each (at 180ktpa HC FeCr) and four
gas cleaning plants
- Imported chromite will feed the Tikhvin smelter until Q3 2008 when the
Voskhod beneficiated chrome ore becomes available
- Ferrochrome produced by Tikhvin will contain approximately 70% Cr metal
and will be sold on a spot basis to markets in Europe, China, Asia and
the United States
- At full production, Tikhvin will consume some 35% of the planned
production from Voskhod

Shevchenko Nickel Project, Kazakhstan

In December 2005, Oriel's Shevchenko nickel project received a positive feasibility study from Bateman Minerals and Metals (South Africa). Consultancy support was provide by Wardell Armstrong International (UK), Mintek (South Africa) and Polysius (part of the ThyssenKrupp group of companies, Germany) for the resource modelling, mining plan, environmental studies, smelting technology and ore pre-treatment processing aspects.

Key Project Information

- 24 year mining life with a 47 year project operating life
- Production in the first 10 years is over 20,000 tpa Ni with approximately
24% Ni contained in FeNi
- NI43-101 compliant Proven and Probable nickel laterite ore reserves of
104.4Mt at
- 0.79% nickel
- Capital direct field cost for process plant, infrastructure and mine of
$450 million and $600 million including indirect field costs, EPCM,
insurances and owner's costs
- Average operating costs of $1.91/lb Ni for initial 10 years and $2.12/lb
Ni for the first 24 years

Oriel has completed over 18,000m of core drilling on the Shevchenko project, of which 3,200m was confirmation drilling, aimed at verifying the existing Soviet data and the remaining 14,800m was classified as infill drilling. In total, some 7,051 exploratory holes were drilled at Shevchenko between 1957 and 1966, with an average depth of 41m for a total of 290,190m. From this, the calculation of the Soviet-era B+C1 and C2 reserves was based on 2,830 drill holes. Results of the 2005 feasibility study gave a AusIMM JORC and NI43-101 compliant resource and reserve estimates as follows:

Resource, Measured and Indicated
137Mt @ 0.8% Ni - 0.5% cut off grade
50,6Mt @ 1% Ni - 0.8% cut off grade

Proven - 21.4Mt @ 0.85% Ni
Probable - 83.0Mt @ 0.77% Ni
Total reserves - 104.4Mt @ 0.79%Ni

Discovered in 1952, the deposit is located approximately 50km southwest of the nearby town of Zhitiqara. The project is extremely well served with main utilities such as power (500kV transmission lines), gas (pipeline linking Russia and Kazakhstan) and a link to the extensive regional and international rail network enabling Shevchenko's ferronickel (FeNi) product to be transported directly to consumers throughout the CIS, Russia and China. Oriel has a Mining Contract with the Government of the Republic of Kazakhstan which allows for full exploitation of the deposit, for the full 24 years with the right of extension.

The average annual FeNi production over the initial 10 years is approximately 86,500t at a nickel grade of 24% Ni for 20,600t of saleable nickel. The 24 year ferroalloy production is expected to average 74,000t with saleable nickel of 18,125tpa.

Ore for the project will be supplied from open pit mining. The mine plan is designed to deliver a nominal 2Mt (calcined) to the beneficiation plant over a 47 year project life. Mining operations cease completely after 24 years. Cumulative ore feed to the plant at the time the mining stops is 55Mt at 0.94% Ni, with a remaining stockpile of 49Mt at an average of 0.62% Ni. This stockpiled ore will be fed to the plant at a constant rate until depleted. The feasibility study assumed DC arc furnace technology to be well suited as a possible potential processing route. The process route using this technology offers an economical solution for extracting the nickel, due to comparatively low capital costs, high overall thermal energy efficiency and high Ni recovery. DC furnace technology has also been shown by Mintek to be well suited to processing the fine Shevchenko ores over the range of compositions expected. Xstrata (previously Falconbridge) has selected a very similar process flowsheet and DC arc technology for their Koniambo project in New Caledonia.

The process flow route selected for the feasibility study was chosen based on the fine particle size of the Shevchenko ore and its average composition. Smelter operations include a Polysius Aerofall™ mill, a Polcal™ calciner and a Polysius Sepol™ dynamic cyclone separator feeding two 80MW direct current (DC) arc furnaces which have been shown to be well suited as an option to process the Shevchenko ores. The overall plant was designed to operate at a feed capacity of just over 2Mt of calcined ore per year.

The mined ore is upgraded by screening of the dried product in the drying plant by 6% for a mass loss of some 15% prior to calcining. Accordingly, the average grade of calcined feed to the furnaces in the initial 10 years is 1.2% nickel from which recoveries across the furnace and after refining is estimated at 92.3%. The low grade screened ore will be stockpiled for treatment later in the project life.

Since the completion of the feasibility study Oriel has been examining a number of alternative process options that may offer Shevchenko potential benefits in terms of capital and operating cost savings. Oriel has therefore contracted engineering consulting and technology supply companies to evaluate and assess all appropriate processing technologies. A decision on the chosen process technology and development timeline will be announced during Q3 2007.

Oriel Resources plc

Condensed consolidated interim income statement for the six months ended 30
June 2007

Six months ended Six months ended
30 June 30 June
2007 2006
(Unaudited) (Unaudited)
$'000 $'000

Operating income 609 392
Operating expenses (10,197) (304)
----------------- ----------------

Operating (loss)/profit (9,588) 88

Finance income 1,839 2,145
Finance expenses (587) (13)

----------------- ----------------

(Loss)/profit before taxation (8,336) 2,220

Taxation 1,534 (670)

----------------- ----------------

Net (loss)/profit for the financial
period (6,802) 1,550

Attributable to:
Equity shareholders of the parent (6,323) 1,550
Minority interest (479) -
----------------- ----------------
(6,802) 1,550
----------------- ----------------
----------------- ----------------

(Loss)/earnings per share
Basic and diluted (1.117)c 0.623c

All amounts above relate to continued operations.

Oriel Resources plc

Condensed consolidated interim balance sheet at 30 June 2007

At 30 June At 30 June At 31 December
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
Non-current assets
Property, plant and equipment 345,424 96,557 296,374
Intangible assets 41,093 - 38,221
Deferred tax assets - - 1,905
Other non-current assets 31,330 1 15,722
----------- ---------- --------------
Total non-current assets 417,847 96,558 352,222

Current assets
Inventories 8,058 107 2,587
Trade and other receivables 29,384 14,786 21,382
Cash and cash equivalents 117,026 465 113,682
----------- ---------- --------------
Total current assets 154,468 15,358 137,651

----------- ---------- --------------
Total assets 572,315 111,916 489,873
----------- ---------- --------------
----------- ---------- --------------

Non-current liabilities
Borrowings 92,202 58,688 89,754
Deferred tax liabilities 29,818 3,056 33,264
Trade and other payables 3,861 - 3,853
Provisions 407 - 407
----------- ---------- --------------
Total non-current liabilities 126,288 61,744 127,278

Current liabilities
Borrowings 11,639 11,034 12,353
Trade and other payables 27,702 3,606 34,844
----------- ---------- --------------
Total current liabilities 39,341 14,640 47,197

----------- ---------- --------------
Total liabilities 165,629 76,384 174,475
----------- ---------- --------------
----------- ---------- --------------

Capital and reserves
Called up share capital 7,066 1,472 5,475
Share premium account 399,726 29,037 309,096
Foreign currency translation
reserve 1,629 2,936 273
Retained earnings (7,759) 2,087 (4,296)
----------- ---------- --------------
Equity attributable to
shareholders of the parent 400,662 35,532 310,548
Minority interests 6,024 - 4,850

----------- ---------- --------------
Total equity and liabilities 572,315 111,916 489,873
----------- ---------- --------------
----------- ---------- --------------

Oriel Resources plc

Condensed consolidated interim cash flow statement for the six months ended
30 June 2007

Six months ended Six months ended
30 June 30 June
2007 2006
(Unaudited) (Unaudited)
$'000 $'000
Cash flows from operating activities
(Loss)/profit from ordinary activities (9,588) 88
Adjustments for:
Depreciation of property, plant
and equipment 84 93
Profit on disposal of subsidiary
undertaking - (264)
Profit on deemed partial disposal
of subsidiary (536) -
Profit on disposal of property,
plant and equipment - (1,504)
Share based payments 2,860 -
Foreign exchange differences (4,588) -
----------------- ----------------
Cash flow from operating activity
before changes in working capital (11,768) (1,587)
Increase in trade and other receivables (23,609) (2,001)
Increase in inventories (5,471) (43)
(Decrease)/increase in trade and
other payables (7,238) 3,158
----------------- ----------------
Cash used by operations (48,086) (473)
Interest paid (587) -
Income tax paid - -
----------------- ----------------
Net cash used in operating activities (48,673) (473)
----------------- ----------------

Investing activities

Purchases of property, plant and
equipment and construction in progress (47,400) (23,115)
Proceeds from sale of property,
plant and equipment and construction
in progress - 2,226
Purchases of intangible assets (1,538) (7)
Proceeds from sale of assets - 77
Purchase of subsidiary undertaking
(net of cash acquired) (65) -
Proceeds from sale of subsidiary
(net of cash disposed) - (5)
Loans issued - (5)
Proceeds from deemed partial disposal
of subsidiary 892 -
Interest income 1,839 -
----------------- ----------------
Cash flows from investing activities (46,272) (20,829)
----------------- ----------------

Financing activities
Issue of ordinary shares (Net of
issue cost) 92,221 -
Proceeds from borrowings - 22,799
Repayments of borrowings - (1,307)
Repayment of finance lease creditors - (48)
----------------- ----------------
Cash flows from financing activities 92,221 21,444
----------------- ----------------

(Decrease)/increase in cash (2,724) 142
Cash and cash equivalents at 1 January 113,682 301
Effect of exchange rate changes on
cash and cash equivalents 6,068 22
----------------- ----------------
Cash and cash equivalents at end
of the period 117,026 465
----------------- ----------------
----------------- ----------------

Oriel Resources plc

Condensed consolidated interim statement of recognised income and expense
for the six months ended 30 June 2007

Six months ended Six months ended
30 June 30 June
2007 2006
(Unaudited) (Unaudited)
$'000 $'000

Exchange translation differences on
consolidation of Group entities 1,487 1,997
----------------- ----------------
Net profit recognised directly in equity 1,487 1,997

(Loss)/profit for the financial period (6,802) 1,550

----------------- ----------------

Total recognised income and expense
for the financial period (5,315) 3,547
----------------- ----------------
----------------- ----------------

Attributable to:
Equity shareholders of the parent (4,967) 3,547
Minority interest (348) -
----------------- ----------------
(5,315) 3,547
----------------- ----------------
----------------- ----------------


Disclosures required pursuant to Toronto Stock Exchange listing:

National Instrument 71-102 ("NI 71-102")
Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
Section 5.2

Oriel Resources plc is:
(a) A designated foreign issuer as defined in NI 71-102;
(b) Incorporated under the laws of England and Wales; and
(c) Subject to the regulatory requirements of the Alternative Investment
Market of the London Stock Exchange (AIM).

Toronto Stock Exchange Company Manual
Minimum Listing Requirements for Foreign Companies
Section 3.24(h)

The conversion rate from United States dollars to Canadian dollars for the
financial information contained within these interim financial statements
is 1.063 as of the effective date of the financial information, being 30
June, 2007.

DATED this 29 day of August 2007

A full version of these accounts, which has been reviewed by the Group's
auditors is available at www.orielresources.com

Contact Information

  • Oriel Resources plc
    Dr Sergey V Kurzin
    Executive Chairman
    +44 (0) 20 7514 0590
    Oriel Resources plc
    Nick Clarke
    Managing Director
    +44 (0) 20 7514 0590
    Oriel Resources plc
    Gavin Dallas
    Marketing and PR
    +44 (0) 20 7514 0590
    +44 (0)20 7514 0591 (FAX)
    Email: info@orielresources.com
    Website: www.orielresources.com
    Bankside Consultants
    Michael Padley / Michael Spriggs
    +44 (0) 20 7367 8888
    Canaccord Adams Limited
    Robin Birchall / Ryan Gaffney
    +44 (0) 20 7050 6500
    Vanguard Shareholder Solutions
    Keith Schaefer
    (604) 608-0824