TIDMORR
RNS Number : 9058T
Oriole Resources PLC
20 November 2023
Oriole Resources PLC
('Oriole Resources' or 'the Company' or 'the Group')
Heads of Terms on the Mbe Licence, Cameroon
Oriole Resources (AIM: ORR), the AIM-quoted exploration company
focussed on West Africa, is delighted to report that it has signed
a non-binding Heads of Terms ('HoT') with Ghana-based BCM
International Limited ('BCM'), a well-respected mining and civil
contractor, for an earn-in by BCM ('Earn-In Agreement') to
fast-track exploration at the Company's 90%-owned Mbe gold licence
('Mbe' or the 'Licence') in central Cameroon. Following the HoT,
the conditional Earn-in Agreement is expected to be executed before
the end of the year.
Highlights
-- Non-binding HoT signed with BCM to enter into the Earn-In
Agreement whereby BCM will earn up to a 50% interest in the Licence
in return for the following staged commitments:
o Following execution of the HoT, BCM will, at its own cost,
complete a period of due diligence ('Due-Diligence Period') at Mbe,
ending no later than 31 January 2024;
o Following execution of the Earn-In Agreement and subject to a
positive outcome of that Due-Diligence Period, BCM will pay Oriole
US$1m cash payment ('Signature Payment');
o BCM will commit to US$4m in exploration expenditure, focused
on defining Resources at the Licence;
o Further success-based payments from BCM to Oriole, the level
of which is subject to the number of resource ounces reported under
JORC.
-- Subject to completion of the Earn-In Agreement, it is
anticipated that maiden drilling will commence at Mbe in
Q1-2024;
-- Beyond these commitments, any further expenditure at Mbe will
be on a contribute or dilute basis. In the event that Oriole's
percentage holding in the Licence falls below 5%, then its interest
will convert to a 3% net smelter returns ('NSR') royalty on future
production from the Licence;
-- Drilling will be provided by BCM, under a separate contract,
at cost plus 10% on an open book basis;
-- Oriole will continue to manage the technical programmes,
under a separate contract, and will provide its geological and
administrative teams to BCM at cost plus 10%;
-- Following signature of the HoT, Oriole has received a
non-refundable payment of US$50k (the 'Advanced Payment'), which
shall be set off against the Signature Payment on execution of the
Earn-In Agreement;
-- The Earn-In Agreement is currently being drafted and is
expected to be executed before the end of 2023 subject to the
satisfaction of certain conditions precedent. Completion of the
Earn-In Agreement will be subject to certain conditions ;
-- The Company will provide a further announcement upon execution of the Earn-In Agreement.
Oriole Resources CEO, Tim Livesey , said: "As with the Bibemi
project, BCM has committed to a significant investment at Mbe, and
we look forward to working with them as partners as we develop and
expand the potential of this highly prospective licence.
"Coming as it does, alongside the Bibemi Heads of Terms
agreement, this deal delivers strategic investment into early-stage
exploration for Oriole and for Cameroon. The 'proof of concept'
works carried out in 2021 and 2022 has delivered and the discovery
made by the Oriole team in 2022/23 at Mbe has opened the area as a
new gold frontier in Africa. We hope that continued exploration
success will drive further interest in Cameroon as a new mining
jurisdiction.
"As a partner to Oriole, BCM brings a wealth of experience in
mining in Africa and we look to capitalise on this alliance across
our projects . Mbe is just one licence in the prospective Eastern
CLP and so it's worth noting that we have four other, neighbouring
licences ripe for similar deals or indeed 'go-it-alone'
exploration. "
Further Details on the Transaction
The Company has signed a HoT with BCM regarding the intention
for both parties to enter into an Earn-In Agreement on the
Company's 90%-owned Mbe gold licence project in central Cameroon,
where Oriole has recently identified high-grade gold mineralisation
(up to 134.10 grammes per tonne ('g/t') at surface) within a 3
kilometre-long by 70-metre-wide structural corridor.
The terms outlined in the HoT would see BCM earn up to a 50%
beneficial interest in the Licence in return for meeting certain
staged commitments as presented in the following table.
BCM Commitment Conditions
US$1m Signature Payment * On execution of Earn-In Agreement.
in cash
* Subject to an initial Due Diligence Period, ending 31
January 2024 and BCM deciding to proceed beyond that
Due Diligence Period.
* On receipt of the payment, Oriole will undertake to
BCM to hold a 10% beneficial interest in the Project
on trust for BCM.
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US$4m exploration funding * Expenditure to be allocated against a pre-agreed work
programme, focussed on identifying and building
Resources within the Licence.
* Upon completion of each US$500k tranche of funding,
Oriole shall undertake to hold an additional 5%
beneficial interest in the Project on trust for BCM.
* The technical programme and all administration will
be managed by Oriole through a separate contract, the
key commercial terms of which will be included in the
Earn-In Agreement and charged to the Project at cost
plus 10%.
* Exploration and Resource drilling to be provided
through a separate contract with BCM and charged to
the Project at cost plus 10% on an open book basis.
------------------------------------------------------------------
Success-based payments * A maximum of 10 Resource payments are payable on the
related to the definition release of JORC Inferred Resource milestones (set at
of JORC-classified Resources, 1-million-ounce increments) in relation to Mbe;
with at least 50% being
estimated within the
Indicated and/or Measured * BCM will pay Oriole the First Resource Payment of
categories. US$1m on the release of a 1-million-ounce
JORC-classified Resource in relation to Mbe;
* Additional resource payments of US$1m each will be
due for each additional million ounces
JORC-classified Resources reported at Mbe up to 5
million ounces, and will increase in value for the
remaining five milestones to 10 million ounces;
* A maximum Cumulative Resource Payment of US$20m will
be payable by BCM to Oriole on delivery of a
10-million-ounce JORC-classified Resource.
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The Earn-In Agreement is currently being drafted and is expected
to be executed before the end of the year, with payment of the
Signature Payment being subject to BCM electing to proceed beyond
the initial Due-Diligence Period. Beyond these commitments, any
further expenditure at Mbe will be on a contribute or dilute basis.
In the event that Oriole's percentage holding in the Licence falls
below 5%, then its interest will convert to a 3% NSR royalty on
future production at Mbe.
BCM are paying Oriole a non-refundable US$50k Advanced Payment,
which will be off-set against the Signature Payment.
Following signing, completion of the Earn-In Agreement will be
conditional on the satisfaction of certain conditions and the
Company will provide a further announcement upon execution of the
Earn-In Agreement in due course.
The transfer of the beneficial interest in the Project to BCM
will be conditional, amongst other things, on obtaining the
requisite governmental or other consents.
Further Details on BCM
BCM began as "Bayswater Contracting", a family firm in Western
Australia in the early 1950s, primarily in the civil works and
mining construction business. Under the same family ownership, BCM
expanded into Ghana in 1990 and thereafter further into Mali,
Tanzania, Guinea and Niger. By the year 2000, BCM had established
itself as one of the leading mining and civil contractors in
Sub-Saharan Africa, an area containing significant mineral
wealth.
BCM is a long-established Contract Mining and Civil Earthworks
Contractor in West Africa . Previous and existing clients of BCM
include: AngloGold Ashanti Limited; African Minerals Limited
(Tonkolili Iron Ore); Abosso Goldfields; Ausenco; Bogosu Ghana
Limited; Cluff Mining; Endeavour Mining, Ghana; Goldfields Ghana
Limited; Lycopodium; Minproc; Randgold Resources; Afrika Marashiki
Gold Limited; Semafo Holdings; Sabodala Mining Company Societe Des
Mines Du Liptako, S A; Newmont Ghana Gold Limited and Oxus Gold
Resources Glencore/Kazzinc.
Most recently, in January 2023, BCM signed a contract mining
agreement with the current owner of the Tonkolili iron ore mine in
Sierra Leone, Leone Rock Metal Group, which has Proven reserves of
15.8 billion tons of iron ore. The Tonkolili mine is Africa's
second-largest iron ore mine and one of the largest magnetite
deposits globally with an estimated operational period of more than
60 years.
The company employs nearly 5,000 people at its sites with its
diversified business, ranging from mining contracting, earthworks,
civil construction, exploration drilling, drill and blasting and
in-mine technical and management support.
Further Details on Mbe
The 312km(2) Mbe licence is located within a wider,
district-scale package of licences known as the Central Licence
Package ('CLP' of the 'Package'). The CLP covers 4,091km(2) of
geologically-prospective ground in the centre of Cameroon, and has
significant potential for orogenic gold mineralisation and other
minerals. The Package comprises nine contiguous licences (five
defined as Eastern CLP, three defined as Western CLP and the
lithium-focussed Gamboukou licence) and the Company has a 90%
interest in all nine licences, which it holds through local
subsidiary companies. The Eastern CLP (Tenekou, Niambaram, Pokor,
Ndom, and Mbe) licences were granted in February 2021 and have an
initial exploration term of three years, plus three renewable
extensions of two years each.
Within the Eastern CLP, work during 2023 has been focussed in
particular on the Mbe licence, where rock-chip sampling over a
3km-long (and at least 70m-wide) north-northeast trending
structural corridor (comprising sulphide-rich and locally
brecciated quartz veins within strongly altered granitic host
rocks) delivered high-grade gold (announcements dated 30 January
2023 and 27 February 2023). Of the 76 samples analysed, 17 samples
yielded greater than 1 g/t Au with best results including 134.10,
131.80, 64.30, 40.80, 19.44 and 16.20 g/t Au. Subsequent artisanal
workings exposed narrow (3-4m wide) trench-like profiles over a
single quartz vein within the broader 70m-wide package of veins.
This enabled the collection of 19 channel-chip samples (22
including QAQC) on six parallel lines, which were completed
perpendicular to the dominant north-east shear trend and covered a
200m strike length (announcement dated 21 June 2023). Seventeen of
the samples graded more than 1 g/t Au, with mineralised intervals
returned on all lines and best intervals including 2.20m grading
8.47 g/t Au (MBTR001), 5.00m grading 2.03 g/t Au (MBTR004) and
2.10m grading 3.69 g/t Au (MBTR005). These results should be
considered partial trenches as they do not test the full width of
the mineralised zone, only the portion exposed in the artisanal
pits.
The Company plans to complete maiden drilling at Mbe in 2024 and
further details on this programme will be announced in due
course.
For further information on Mbe, including maps and a JORC Table
1, please see the following page of the
Company's website: https://orioleresources.com/projects/central-licence-package/ .
Competent Persons Statement
The information in this release that relates to Exploration
Results has been compiled by Claire Bay (Executive Director,
Exploration and Business Development). Claire Bay (MGeol, CGeol) is
a Competent Person as defined in the JORC code and takes
responsibility for the release of this information. Claire has
reviewed the information in this announcement and confirms that she
is not aware of any new information or data that materially affects
the information reproduced here.
** ENDS **
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
For further information please visit www.orioleresources.com ,
@OrioleResources on Twitter, or contact:
Oriole Resources Plc Tel: +44 (0)23 8065 1649
Tim Livesey / Bob Smeeton / Claire
Bay
BlytheRay (IR/PR Contact) Tel: +44 (0)20 7138 3204
Tim Blythe / Megan Ray
Grant Thornton UK LLP Tel: +44 (0)20 7383 5100
Samantha Harrison / Ciara Donnelly
SP Angel Corporate Finance LLP Tel: +44 (0)20 3470 0470
Ewan Leggat / Harry Davies-Ball
Notes to Editors:
Oriole Resources PLC is an AIM-quoted gold exploration company,
operating in West Africa. It is focussed on early-stage exploration
in Cameroon, where the Company has a maiden Resource of 305,000 oz
Au at 2.19g/t in the JORC Inferred category at the Bibemi project
and has identified multi-kilometre gold and lithium anomalism
within the district-scale Central Licence Package project. At the
more advanced Senala gold project in Senegal, Oriole was advised by
IAMGOLD on 26 April 2023 that AGEM Senegal Exploration Suarl
('AGEM') was now a wholly-owned subsidiary of Managem Group. As
previously announced, AGEM has earned an initial 51% beneficial
interest in the Senala Exploration Licence by spending US$4 million
and has the option to spend up to a further US$4 million by 28
February 2024 to earn an additional 19% interest in the licence.
The Company also has several interests and royalties in companies
operating in East Africa and Turkey that could deliver future cash
flow.
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