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News from CNW Group

Thursday, September 29, 2005

LONDON, UK, Sept. 29 /CNW/ - Oriel Resources plc, the AIM and Toronto Stock Exchange listed chrome and nickel developer and gold exploration and development company, today announces its interim results for the six months ended 30th June 2005.

    Highlights:

        -  Shares placed in January for proceeds of approximately
           pnds stlg 13.25m
        -  Successful listing on Toronto Stock Exchange in February 2005
        -  Sale agreement in February 2005 of Oriel's 14% interest in the
           Varvarinskoye gold-copper project for $7.25m (pnds stlg 3.9m)
           cash.
        -  Completed acquisitions of Voskhod chrome deposit in January 2005
           and Tokhtazan gold deposit in May 2005
        -  Positive preliminary assessment study (PAS) on Voskhod

    Commenting, Dr Sergey Kurzin, Executive Chairman of Oriel Resources said:

"We continue to progress our projects. We announced the results of the PAS on Voskhod in September which proved our confidence in this asset and allowed us to approve the design and construction of an exploration decline to access the chrome orebody as a first stage of the mine development. We also anticipate the completion of the Shevchenko Definitive Feasibility Study in early 2006.

"We have substantial cash resources, strong local partnerships and local and federal government support in the countries in which we operate, which provide a sound platform for growth and make the management team confident that the Company will deliver value for shareholders."


    Oriel

    Chairman's Statement

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

Meeting the challenges over the past 18 months since Oriel's admission to AIM has been rewarding. Technical studies on each of the primary projects of the Company have been positive.

In February 2005 we acquired the Voskhod Chrome asset as a complementary commodity to our Shevchenko Nickel project. Since then we have progressed the project to the stage where the decision was taken to commence the initial development of an underground mine. The initial stages of mine development and design for an exploration decline are relatively low cost and will be undertaken simultaneously with the completion of a definitive feasibility study ("DFS"). The preliminary assessment study ("PAS"), authored by Steffen, Robertson & Kirsten (UK) Ltd ("SRK"), shows extremely robust economics and provides the basis for our decision to expedite development so as to accelerate a positive cash flow for the Company in 2007.

JSC Varvarinskoye

In June 2005 Oriel completed the sale of Althames Holdings Limited, the holder of its 14% interest in JSC Varvarinskoye, the operating subsidiary of the gold mining company European Minerals Corporation. The initial proceeds of the transaction, US$5.0 million in cash have already been received. Oriel will receive the final balance of the consideration of US$2.25 million in cash on the earlier of the 15th business day following the date of the first gold pour from the Varvarinskoye mine or on 31 December 2006. The 14% interest in JSC Varvarinskoye was acquired on 3 March 2004 for a consideration of pnds stlg 300,000 paid wholly in Oriel shares.

Management team and quality partnerships

I am pleased to announce that recent changes in the board structure, with the redefinition of certain roles, reflect the direction in which Oriel is evolving and progressing as a company. The core of our operations are centred in Kazakhstan and in recognition of this fact the board of directors has appointed, Mr Takhirzhan T Baratov as an executive director of Oriel. Mr Baratov became involved with the mining industry in 1994 and has been General Director of Muzbel LLP ("Muzbel"), Oriel's subsidiary in Almaty, since before Oriel acquired its interest in the Shevchenko project. He has advised and consulted to a number of UK and Canadian public companies and has been the director of a number of joint ventures in Kazakhstan. In addition, Mr Baratov is currently the General Director of Voskhod-Oriel LLP the 100% owner of the Voskhod project.

In July 2005 Dr Max Baker resigned from the board of the Company. Dr Baker felt it was appropriate to step down as a director in view of the Company's progress from exploration to project development. Dr Baker will continue to act as chief geologist to the Company on a full-time basis during the final stages of the DFS of the Shevchenko project and commencement of the DFS for the Voskhod project.

Reflecting the Company's evolution and following the listing and commencement of trading of Oriel shares on the Toronto Stock Exchange in February 2005, it was considered prudent to appoint two Canadian non-executive directors. Roger T Richer and John D Reynolds were formally appointed to the board in March 2005.

Since its inception, Oriel has established a strong management team with experience in building successful projects and effecting and developing exploration strategies worldwide. We also have substantial cash resources, strong local partnerships and local and federal governmental support in both Kazakhstan and Kyrgyzstan, all of which provide a sound platform for future growth.

Financial results

Oriel remains in the exploration and development stage on all projects. As a result of the sale of the 14% interest in Varvarinskoye a profit was achieved in the period. The retained profit for the period ended 30 June 2005 of pnds stlg 2.7 million was achieved after exploration expenditure of pnds stlg 0.7 million and administrative expenditure of pnds stlg 0.6 million. Additionally, the Group incurred exploration costs of pnds stlg 2.9 million relating to the Shevchenko Nickel project, which have been deferred in line with the Group's accounting policy on mining rights and deferred exploration. Earnings per share were 1.4 pence compared to a loss per share of 5.4 pence in the period to 30 June 2004.

    Dr Sergey V Kurzin
    Executive Chairman


    Oriel Resources plc

    Review of Operations

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

    VOSKHOD CHROME

Oriel purchased Voskhod in February 2005 for the equivalent of US$15.0 million in cash and the allotment of 9,181,352 shares, at the time valuing Voskhod at US$25.0 million. The deposit has a NI 43-101 compliant resource of 18.7 million tonnes at a grade of 46.2% Cr2O3 which was calculated by SRK in August 2004. In April 2005 Oriel commenced a diamond drilling programme on the deposit to confirm the previous data set.

A drill programme was subsequently undertaken under the direct supervision of SRK and encompassed both resource confirmation and geotechnical drilling. To date 40 diamond drillholes with a combined 13,042m of drilling have been completed. A further ten resource and one geotechnical drillholes are planned to complete both programmes. In addition to the monitoring role, SRK was commissioned to prepare a PAS for an underground mine and ore beneficiation plant and direct sales of chromite ore to markets in Russia and China.

The PAS was completed in September 2005. SRK undertook an audit of the Soviet compiled Voskhod resource estimate in August 2004 and was sufficiently confident of the data set to place them into the AusIMM JORC (1999) classified Indicated and Inferred categories. The SRK calculated resource comprises 18.7 Mt at 46.2% Cr2O3 (Indicated) and 0.59Mt at 14.56% Cr2O3 (Inferred). This resource statement complies with National Instrument (NI) 43-101 standards for reporting of resources and was prepared by Dr Alwyn Annels of SRK. The economic estimate has been based entirely on the Indicated resources and was prepared by Mr Beare of SRK in July 2005. Dr Annels and Mr Beare are both designated as qualified persons under the terms of NI 43-101. These reserves suggest that mine production can be sustained at Voskhod at 700,000 tonnes per annum for a period of 25 years.

SRK was assisted in the production of the PAS by Heinz Pariser, Alloy Metals & Steel Market Research, which provided the chromite ore marketing and pricing data. In addition Mintek, of South Africa was used for the process options and preliminary plant design.

On the basis of the PAS, which indicated favourable economic returns, coupled with the high quality of mineralization intercepted in the diamond drilling programme, it was decided that Oriel should immediately fast-track the project by undertaking initial project development simultaneously with the completion of the DFS, both of which are expected by the end of March 2006. With a view to cutting the lead time to production, Oriel will initiate development of an exploration decline and has appointed SRK to undertake the design of the ramp/decline, which is to be developed, subject to State approval, commencing in March/April 2006.

Oriel is obtaining proposals from three international engineering contractors for the design and costing of the chromite beneficiation plant, in order to enable a decision to be made on the DFS engineers and process design companies during October. Metallurgical test work will be used by the nominated engineering contractor to complete the project design and costing elements of the study.

Through to the end of 2005 additional work required to complete the ramp design for the feasibility study will be completed by SRK. Geotechnical drilling will be carried out along the proposed decline route and water monitoring wells installed. A representative 500kg sample of chromite ore will be sent to South Africa to the Mintek laboratory facilities for test work to assist in the final plant design.

Oriel is in consultation with its advisors, Endeavour Financial, on the availability of debt financing for the project. A number of international banks have been approached and have indicated their interest in providing up to 70% debt funding. Equity financing of the project will be provided entirely from Oriels existing cash reserves.

SHEVCHENKO NICKEL

In 2004 Oriel appointed Bateman Metals, South Africa, as lead engineers for the DFS and scheduled completion for September 2005. This date was viewed as being aggressive and due to delays in the receipt of final tenders and reworking of the engineering and process costs in order to achieve project optimisation, Oriel has deemed it prudent to delay the completion of the DFS until 1st Quarter 2006.

An extensive programme of geotechnical drilling, totalling 1,535m has been completed, targeting the needs of both civil construction and resource sterilisation. In addition, an 1,800m programme of hydrological drilling to provide data for groundwater modelling and monitoring purposes as part of the Environmental and Social Impact Study has been completed. 16 monitoring wells were constructed to be used as long-term monitoring holes, for the lifetime of the proposed Shevchenko mining project.

Shevchenko comprises nine mineral ore bodies (Shevchenko, Blizhny, Grigoriev, Tarasov, Jubilee, Yuzhniy-1, 2, 3 and Kundybai) and Oriel made the decision to drill eight of these ore bodies commensurate with the DFS. Oriel has completed infill and confirmation drilling on eight of these, with 6,200m of drilling on the Yuzhniy orebodies in the reporting period.

In March 2005 a demonstration scale test campaign on a 450 tonne sample of Shevchenko nickel ore was conducted in the 2MVA DC arc furnace at the Mintek facilities in South Africa. This programme confirmed the operating conditions for the furnace and allowed Bateman, South Africa, to use the optimised process parameters in the detailed design and costing. In addition, a 70 tonne sample of ore was tested at the Polysius, ThyssenKrupp, facilities in Germany for the milling, drying, calcining and upgrade characteristics. All the metallurgical test work completed to date has confirmed the amenability of the ore to the selected pre-treatment and smelting processes selected.

The detailed Environmental and Social Impact Assessment is being prepared to World Bank standards by Wardell Armstrong International, UK, in collaboration with the local Kazakhstan Institute, Kazmechanobr, who are preparing the locally required environmental statements.

Negotiations with potential off-takers for the ferronickel product have been progressing during the period and Oriel expects to finalise the details before completion of the DFS.

In association with our advisors Endeavour Financial, Oriel has received positive responses in respect of indicative term sheets from a number of international banks for the debt portion of the required project financing.

In July 2005 Oriel received from the Government of Kazakhstan notification that Muzbel LLP has been granted certain tax incentives through the existing Investment Contract for the development of the Shevchenko plant. These incentives include: five year accelerated depreciation on capital expenditure and exemption from land and property taxes for five years following commissioning of the plant.

GOLD PROJECTS

The Board of Oriel continues to consider its strategic options regarding the following projects.

Taldybulak Gold-Copper Project (Kyrgyzstan)

On 10 May 2005, Oriel entered into an option agreement to acquire the entire issued share capital of Kami Associates Limited (KAL). KAL holds a 100% interest in Talas Copper Gold Limited Liability Company, a company which holds the 42.89 km2 licence for the geological exploration of the Taldybulak deposit in the Talas region of the Republic of Kyrgyzstan. The Company paid an initial consideration of US$1.5 million in cash for the option. Consideration for the exercise of the option is the issue of such number of shares having a value of pnds stlg 1 million or the payment of pnds stlg 1 million in cash (at the sole discretion of the Company) and an additional US$1.5 million in cash payable 12 months from completion of the acquisition in the event the Company continues to retain the benefit of the exploration licence at that time.

A Soviet type C1+C2 resource for Taldybulak of 13.5 million tonnes at 1.42 g/t gold and 0.23% copper has been lodged with the State Reserves Committee. These resource estimates are under the Soviet classification system and are not CIMM, JORC (1999) or NI 43-101 compliant.

Oriel is encouraged that the style of mineralisation at Taldybulak is sufficiently similar with known porphyry deposits and that with the encouraging surface and drill hole intercepts there is potential for the occurrence of a multi-million ounce gold deposit.

Since signing the option agreement, Oriel has had the exploration programme approved by the Kyrgyz authorities and commenced with construction of an access road to the project site. Oriel has completed a topographic survey and detailed geological mapping of the licence. The results of geophysical surveys to define the structure and extent of mineralisation are currently being assessed to enable Oriel to identify potential additional drilling targets. Geochemical and trench sampling programmes have been initiated, with these programmes currently ongoing. A drilling programme is planned to commence on Taldybulak in September 2005.

Tokhtazan Gold Project (Kyrgyzstan)

On 29 April 2005, Oriel agreed to complete the acquisition of the Tokhtazan gold deposit, through its 100% owned subsidiary, Oriel in Kyrgyzstan LLC. The purchase consideration for the acquisition was an initial option fee of US$800,000 paid in March 2005 and the issue of 1,000,000 shares fully paid as consideration for the exercise of the option.

Under the terms of the acquisition, Oriel acquired two licences issued by the Government of Kyrgyzstan. Prior to agreeing to complete the acquisition, Oriel commissioned Wardell Armstrong International (WAI) to undertake a review of the property and Dr. Phil Newall duly completed a site visit, data review and rendered a technical report which indicated that the project has considerable merit. Dr. Newall is a qualified person in accordance with definitions set out in National Instrument 43-101 and is a UK-based chartered engineer (CEng) and Fellow of the Institute of Materials, Minerals and Mining (FIMMM).

Oriel considers Tokhtazan to be a middle stage exploration play having a significant gold resource and that previous exploration has gone some way to allowing a properly quantified resource to be established. A 2000 resource statement by the previous licensee, Cameco, indicated that the resource fell into the Soviet C2 category, and that it consisted of 21.2 million tonnes at a grade of 1.57 g/t of gold at a cut-off grade of 0.5g/tAu. These resource estimates do not comply with the CIMM classification; however the resource has been reported by WAI to compare with the CIMM Inferred category. Oriel considers there to be upside potential for additional resource within the deposit itself and the surrounding areas.

An initial geological exploration programme on the license area has commenced with the construction of an access road, topographic surveying and detailed geological mapping. Geophysical surveys of the main mineralized areas of the licence have been undertaken, the results of which are currently being interpreted. Trenches across the main mineralized zones have been outlined and are currently being excavated. A 2005 drilling programme has been designed and planned to commence prior to the onset of the winter season.

Taboga Gold Project (Russian Federation)

The Company currently holds an option to acquire an indirect 50% undivided working interest in the Taboga Gold Project in the Magadan region of Russia in partnership with OAO Dukatskaya Gorno-Geologicheskaya Company. The option is over the entire issued share capital of Caledone Finance Limited, a company incorporated in Niue, holding a 50% interest in Taboga Gorno- Geological Company, which holds the resource rights to the Taboga Gold Project.

Consideration for the exercise of the option is the issuance to the optionor of such number of Oriel shares having a value of pnds stlg 500,000 or the payment of pnds stlg 500,000 in cash to the vendor at the sole discretion of Oriel.

On behalf of Oriel an exploration programme was undertaken, consisting of the drilling of three fences of three holes each across the main target profiles comprising in total 2,100m of diamond drilling. All holes intersected disseminated sulphide mineralisation; zones of quartz-sericite metasomatism; and quartz and quartz-carbonate veinlets. Assay results for all samples taken from the drilling campaign are awaited.

Olcha Gold Project (Russian Federation)

Caledone Finance Limited also has a 50% interest in the Korkodonskaya Mining Geological Company, on behalf of which an application has been made for certain licences relating to geological exploration in respect of the Olcha group of epithermal gold deposits. The application is still pending.

    <<

    Oriel Resources plc

    Consolidated profit and loss account for the period ended 30 June 2005

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

                                                          Period      Period
                                                            from        from
                                            6 months      2 July      2 July
                                               ended     2003 to     2003 to
                                             30 June     30 June 31 December
                                                2005        2004        2004
                                    Note  (Unaudited) (Unaudited)   (Audited)
                                           pnds stlg   pnds stlg   pnds stlg
                                                '000        '000        '000

    Exploration expenses                        (655)     (2,573)     (7,481)

    Other administrative expenses               (634)     (2,223)     (4,200)

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

    Administrative expenses and
     operating loss                           (1,289)     (4,796)    (11,681)

    Interest receivable and similar
     income                                      452         269         775

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


    Loss on ordinary activities                 (837)     (4,527)    (10,906)

    Profit on disposal of
     subsidiary undertaking           4        3,498           -           -

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


    Profit/(loss) before taxation              2,661      (4,527)    (10,906)

    Taxation on profit/(loss) on
     ordinary activities                           -           -           -

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

    Profit/(loss) after taxation               2,661      (4,527)    (10,906)

    Minority interest                             33         143         394

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

    Retained profit/(loss)                     2,694      (4,384)    (10,512)
                                          ----------- ----------- -----------
                                          ----------- ----------- -----------

    Earnings/loss per share
    Basic earnings/(loss) per share   2         1.4p       (5.4)p      (9.7)p
    Diluted earnings/(loss) per
     share                            2         1.4p       (5.4)p      (9.7)p

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

    All amounts relate to continuing activities.


    Oriel Resources plc

    Consolidated balance sheet at 30 June 2005

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

                                                                       At 31
                                          At 30 June  At 30 June    December
                                                2005        2004        2004
                                    Note  (Unaudited) (Unaudited)   (Audited)
                                           pnds stlg   pnds stlg   pnds stlg
                                                '000        '000        '000

    Fixed assets
    Tangible assets                              831       1,312         771
    Intangible assets                         29,187      12,667      12,068
    Fixed asset investments                      806         784         300
                                          ----------- ----------- -----------
                                              30,824      14,763      13,139

    Current assets
    Debtors: amounts due within           -----------------------------------
     one year                                    359         108         432
    Debtors: amounts due after
     one year                                  1,234           -           -
                                          -----------------------------------
                                               1,593         108         432
    Cash and short term deposits              27,078      30,430      26,212
                                          ----------- ----------- -----------
                                              28,671      30,538      26,644
                                          ----------- ----------- -----------
    Creditors: amounts falling
     due within one year                        (586)       (144)       (532)
                                          ----------- ----------- -----------

    Net current assets                        28,085      30,394      26,112
                                          ----------- ----------- -----------
    Total assets less current
     liabilities                              58,909      45,157      39,251

    Creditors: amounts falling due
     after more than one year                 (1,160)     (1,185)     (1,086)

    Provisions for liabilities and
     charges                                    (200)          -        (200)
                                          ----------- ----------- -----------

    Net assets                                57,549      43,972      37,965
                                          ----------- ----------- -----------
                                          ----------- ----------- -----------

    Capital and reserves
    Called up share capital                    2,016       1,635       1,645
    Share premium account             5       52,568      40,596      40,710
    Merger reserve                    5        9,744       5,099       5,099
    Profit and loss account           5       (7,541)     (4,384)    (10,305)
                                          ----------- ----------- -----------

    Shareholders' funds - equity              56,787      42,946      37,149

    Minority interests - equity                  762       1,026         816

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

                                              57,549      43,972      37,965
                                          ----------- ----------- -----------
                                          ----------- ----------- -----------


    Oriel Resources plc

    Consolidated cash flow statement for the period ended 30 June 2005

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

                                                          Period      Period
                                                            from        from
                                            6 months      2 July      2 July
                                               ended     2003 to     2003 to
                                             30 June     30 June 30 December
                                                2005        2004        2004
                                    Note  (Unaudited) (Unaudited)   (Audited)
                                           pnds stlg   pnds stlg   pnds stlg
                                                '000        '000        '000

    Net cash outflow from operating
     activities                       6       (2,399)     (6,452)    (10,018)

    Returns on investments and
     servicing of finance
    Interest received                            452         269         775
                                          ----------- ----------- -----------
    Net cash inflow from returns on
     investments and servicing of
     finance                                     452         269         775
                                          ----------- ----------- -----------

    Capital expenditure and
     financial investment
    Purchase of tangible fixed assets            (99)     (1,335)     (1,459)
    Purchase of fixed asset investment          (806)          -           -
    Purchase of intangible assets             (2,864)          -      (1,128)
                                          ----------- ----------- -----------
    Net cash outflow from capital
     expenditure and financial
     investment                               (3,769)     (1,335)     (2,587)
                                          ----------- ----------- -----------

    Acquisitions and disposals
    Purchase of subsidiary
     undertakings                             (8,640)     (3,085)     (3,085)
    Disposal of subsidiary
     undertaking                      4        2,564           -           -
                                          ----------- ----------- -----------
    Net cash outflow from
     acquisitions and disposals               (6,076)     (3,085)     (3,085)
                                          ----------- ----------- -----------


    Cash outflow before management
     of liquid resources and
     financing                               (11,792)    (10,603)    (14,915)

    Movement of liquid resources
    Movement on deposits                      (8,724)    (25,615)    (15,541)
    Purchase of trade investments                  -        (917)       (917)
    Sale of trade investments                      -           -         484
                                          ----------- ----------- -----------
    Cash outflow from management of
     liquid resources                         (8,724)    (26,532)    (15,974)
                                          ----------- ----------- -----------

    Financing
    Issue of ordinary shares                  12,076      41,800      41,800
    Exercise of share options and
     warrants                                     50         150         275
                                          ----------- ----------- -----------
    Cash inflow from financing                12,126      41,950      42,075
                                          ----------- ----------- -----------

                                          ----------- ----------- -----------
    (Decrease)/increase in cash for
     the period                       7       (8,390)      4,815      11,186
                                          ----------- ----------- -----------
                                          ----------- ----------- -----------


    Oriel Resources plc

    Notes to the Interim Report for the period ended 30 June 2005

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

    1   Accounting policies

        Basis of preparation of Financial Statements

        The interim financial information set out in pages 9 to 14 has been
        prepared on the same basis and using the same accounting policies as
        were applied in drawing up the Group's statutory financial statements
        for the period ended 31 December 2004 and have been prepared under
        the historical cost convention, unless stated otherwise and in
        accordance with applicable accounting standards.

        The financial information for the 6 months ended 30 June 2005 and
        period ended 30 June 2004 is unaudited and within the meaning of
        section 240 of the Companies Act 1985, such accounts do not
        constitute full statutory accounts of the Group.

        Where purchase consideration has included the issue of shares in the
        parent company, Oriel Resources Plc, the purchase price has been
        adjusted to reflect the fair value of the consideration on the date
        of purchase.

    2   Basic and diluted earnings/(loss) per share

        The basic earnings per share of 1.4 pence (2004: 5.4 pence loss) is
        calculated in accordance with FRS22 (Earnings per share), on a profit
        on ordinary activities after tax of pnds stlg 2,693,613 (2004:
        pnds stlg 4,383,850 loss) and on 193,004,841 ordinary shares (2004:
        80,947,137), being the weighted average number of ordinary shares in
        issue during the period.

        The diluted earnings per share of 1.4 pence is calculated in
        accordance with FRS22 (Earnings per share), on a profit on ordinary
        activities after tax of pnds stlg 2,693,613 and on 198,181,600
        ordinary shares, being the weighted average number of dilutive
        potential ordinary shares in issue during the period.

    3   Dividends

        The directors do not recommend the payment of a dividend for the
        period.

    4   Disposal of subsidiary undertaking

        On 19 May 2005 the Group disposed of its subsidiary Althames Holdings
        Limited for $7,250,000, representing a profit on disposal of
        pnds stlg 3,498,000. $2,250,000 of the consideration will be received
        at the earlier of the 15th business day following the date of the
        first gold pour at the Varvarinskoye mine or 31 December 2006.

    5   Reserves

                                      Share                Profit
                                    premium     Merger   and loss
                                    account    reserve    account      Total
                                  pnds stlg  pnds stlg  pnds stlg  pnds stlg
                                       '000       '000       '000       '000

        At 1 January 2005            40,710      5,099    (10,305)    35,504
        Issue of shares              13,032      4,645          -     17,677
        Profit for the period             -          -      2,694      2,694
        Translation differences
         on foreign currency net
         investments in subsidiary
         undertakings                     -          -         70         70
        Share issue costs            (1,174)         -                (1,174)
                                  ---------- ---------- ---------- ----------

        At 30 June 2005              52,568      9,744     (7,541)    54,771
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    6   Reconciliation of operating loss to net cash outflow form operating
        activities

                                            6 months      Period      Period
                                               ended       ended       ended
                                             30 June     30 June 30 December
                                                2005        2004        2004
                                           pnds stlg   pnds stlg   pnds stlg
                                                '000        '000        '000

        Operating loss                        (1,289)     (4,796)    (11,681)
        Depreciation                              41          23         142
        Decrease/(increase) in debtors            73        (109)       (432)
        Increase/(decrease) in creditors         155      (1,991)     (1,864)
        Provision for rehabilitation               -           -         200
        Provision for impairment                   -         433       2,663
        Loss on disposal of listed
         investments                               -           -         433
        Foreign exchange differences          (1,379)        (12)        521
                                          ----------- ----------- -----------

        Net cash outflow from operating
         activities                           (2,399)     (6,452)    (10,018)
                                          ----------- ----------- -----------
                                          ----------- ----------- -----------

    7   Reconciliation of net cash flow to movement in net funds

                                            6 months      Period      Period
                                               ended       ended       ended
                                             30 June     30 June 31 December
                                                2005        2004        2004
                                           pnds stlg   pnds stlg   pnds stlg
                                                '000        '000        '000

        (Decrease)/increase in cash in the
          period                              (8,390)      4,815      11,186

        Cash flow from management of liquid
         resources                             8,724      25,606      15,541

        Exchange differences                     532           9        (515)

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


                                                 866      30,430      26,212

        Net funds at beginning of period      26,212           -           -

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

        Net funds at the end of period        27,078      30,430      26,212
                                          ----------- ----------- -----------
                                          ----------- ----------- -----------
    >>

For further information: please contact: Dr Sergey V Kurzin, Executive Chairman, Oriel Resources plc, Tel: +44 (0) 20 7514 0590; Nick Clarke, Director of Mining, Oriel Resources plc, Tel: +44 (0) 20 7514 0590; Jonathon Brill, Billy Clegg, Financial Dynamics, Direct: + 44 (0) 20 7831 3113; Paul Lathigee, Vanguard Shareholder Solutions, Direct: (604) 608-0824

© CNW Group