REG - Oriole Resources PLC - Bibemi Update - Heads of Terms signed with BCM

Oriole ResourcesAnnouncement

20/11/2023 07:00

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RNS Number : 9057T  Oriole Resources PLC  20 November 2023

Oriole Resources PLC

('Oriole Resources' or 'the Company' or 'the Group')

 

Heads of Terms on the Bibemi Project, 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 development of the Company's 92.2%-owned Bibemi gold
project ('Bibemi' or 'the Project') in northern Cameroon. Following the
signature of the HoT, the conditional Earn-in Agreement is expected to be
executed before the end of this 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 Bibemi in return for the
following staged commitments:

o  Following execution of the Earn-In Agreement, BCM will make a US$500k cash
payment to Oriole ('Signature Payment') on or before 31 December 2023;

o  BCM will commit to US$4m in exploration expenditure, a large component of
which will be to undertake resource-expansion drilling at the Project;

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 execution of the Earn-In Agreement, it is anticipated that
drilling will resume at the project in Q1-2024. In the meantime, the Company
is continuing to progress various technical studies to support the application
for an exploitation licence in 2024;

·    Beyond these commitments, any further expenditure at Bibemi will be
on a contribute or dilute basis. In the event that Oriole's percentage holding
in Bibemi falls below 5%, then its interest will convert to a 3% net smelter
returns ('NSR') royalty on future production at the Project;

·    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 and will
provide its geological and administrative teams to BCM, under a separate
contract, 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;

·    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.

·    The Company will provide a further announcement upon execution of the
Earn-In Agreement.

 

Oriole Resources CEO, Tim Livesey, said: "Following the great success in
our exploration programmes to date, we are delighted to welcome BCM as
incoming partners on the Bibemi project, where in late 2022 we delivered
Cameroon's first ever JORC-classified gold resource.

"We are pleased that the value proposition has been recognised and we look
forward to working with BCM to enlarge and upgrade the maiden resource at
Bakassi Zone 1 as well as identifying additional resources within the wider
Bibemi licence.

"BCM brings decades of experience in the West African mining scene and has a
highly competent management team and skilled workforce, with extensive
experience in mine construction and operations support.

"In addition to the upfront cash component, the structure of the deal sees a
significant inflow of direct investment into resource development which will
help fast-track our pathway to development. Whilst Oriole will be the
operators of the early works, BCM will supply equipment and drilling capacity,
with both parties working on an open book system as true partners in the
venture.

"Success-based payments on resource addition have also been included in the
deal, to ensure exposure to the exploration upside at the Project and to give
Oriole the potential for additional cash payments as the joint venture
progresses.

"We have always believed that Bibemi has the capacity to become a model for
gold mine development in Cameroon and the addition of funding and project
development capabilities from our new partners will help us move towards that
goal.

"I would like to thank our shareholders for their patience; negotiating
earn-in agreements in a new jurisdiction can be time consuming and we have
been conscious of the need to move quickly and yet still deliver an equitable
investment structure.  I am very pleased to note that BCM has approached the
discussions with a willingness to align our interests and to work together as
joint leaders in this new mining frontier."

 

 

 

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 92.2%-owned Bibemi gold
project in northern Cameroon, where Oriole has already reported a
305,000-ounce ('oz') maiden gold (or 'Au') resource for the Bakassi Zone 1
prospect. The terms outlined in the HoT would see BCM earn up to a 50%
beneficial interest in the Project in return for meeting certain staged
commitments as presented in the following table.

 

 BCM Commitment                                                                   Conditions

 US$500k Signature Payment in cash                                                ·    Following execution of the Earn-In Agreement and on or before 31
                                                                                  December 2023.

                                                                                  ·    On receipt of the payment, Oriole will undertake to BCM to hold a 10%
                                                                                  beneficial interest in the Project on trust for BCM.

 US$4m exploration funding                                                        ·    Expenditure by BCM against this commitment to accrue immediately
                                                                                  following signing of the Earn-In Agreement.

                                                                                  ·    Expenditure to be allocated against a pre-agreed work programme,
                                                                                  focussed on expanding and upgrading Resources at the Project and progressing
                                                                                  the application for an Exploitation Licence.

                                                                                  ·    Upon completion of each US$500k of 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 related to the definition of JORC classified Resources,   ·    First Resource Payment: on the release of a 1-million-ounce
 with at least 50% being estimated within the Indicated and/or Measured           JORC-classified Resource in relation to the Project, BCM will pay Oriole the
 categories.                                                                      sum of US$1m in cash;

                                                                                  ·    Second Resource Payment: on the release of a 2-million-ounce
                                                                                  JORC-classified Resource in relation to the Project, BCM will pay Oriole an
                                                                                  additional sum of US$1 million in cash; and

                                                                                  ·    Third Resource Payment: on the release of a 3-million-ounce
                                                                                  JORC-classified Resource in relation to the Project, BCM will pay Oriole an
                                                                                  additional sum of US$1 million in cash.

 

 

The Earn-In Agreement is currently being drafted and is expected to be
executed before the end of the year. Beyond these commitments, any further
expenditure at Bibemi will be on a contribute or dilute basis. In the event
that Oriole's percentage holding in Bibemi falls below 5%, then its interest
will convert to a 3% NSR royalty on future production at the Project.

 

BCM are paying Oriole a non-refundable US$50k Advanced Payment, which will be
off-set against the Signature Payment.

 

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.

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 Bibemi

 

At the Bibemi orogenic gold project in northern Cameroon (177km(2) in
area), the Company's exploration to date has identified shear-hosted gold
mineralisation at four main prospects - Bakassi Zone 1, Bakassi Zone
2, Lawa West and Lawa East - within a 12km-long mineralised hydrothermal
system at surface. Since Q1-2021, the Company has completed four phases of
diamond drilling at the Project for a total of 6,685.40m in 54 holes. The
majority of the drilling has been focussed on a circa 1km section at the
southern end of Bakassi Zone 1 and has delivered best intersections of
14.80m grading 4.27 g/t Au and 7.70m grading 2.74 g/t Au (hole BBDD050), 6.50m
grading 3.92 g/t Au (hole BBDD034), 5.20m grading 1.97 g/t Au (hole BBDD031),
and 9.20m grading 1.31 g/t Au (hole BBDD042) (announcements dated 20
December 2021, 9 February 2022 and 15 September 2022).

On 12 December 2022, the Company reported a maiden Resource for the Bakassi
zone 1 prospect of 305,000 oz grading 2.19 g/t Au in the JORC Inferred
category, within the limit of a US$1,800/oz gold price pit shell. As far as
the Company is aware, this is the first ever JORC-classified Resource
published for gold in Cameroon. The Resource, which was estimated using 28
diamond holes for a total of 3,840m, was modelled over a strike length of
1,220m and to a depth of 260m below surface, using a cut-off grade of 0.30 g/t
Au and a top-cut of 20 g/t Au. In addition to the Resource, there is an
Exploration Target estimated to be between 1.5 and 2.2 million tonnes at
grades ranging from 1.10 to 2.10 g/t for between 53,000 and 148,000 oz of Au.
The Exploration Target is along strike of the Resource in areas of the
deposit, where there is currently insufficient sample support to be classified
as Inferred Resource.

With infill drilling, it is expected that the size and confidence level of the
existing Resource will be increased to incorporate some of the additional
ounces. There also exists significant potential at the other three prospects
on the licence to deliver additional resources, with the ultimate goal of
developing a multi-pit mine operation.

In accordance with the Cameroon Mining Code, the Company is currently
undertaking a series of local-level technical studies, including a baseline
environmental and social impact assessment. These studies will continue
throughout the remainder of 2023 and will be submitted to the Ministry as part
of the Project's application for an Exploitation Licence at the Project.

For further information on the Bibemi project, including maps and a JORC Table
1, please see the following page of the Company's
website https://orioleresources.com/projects/bibemi/
(https://orioleresources.com/projects/bibemi/) .

 

 

Competent Persons Statement

The information in this release that relates to the Mineral Resources and
Exploration Targets is extracted from the news release dated 12(th) December
2022 and available on the Company website. The Company confirms that it is not
aware of any new information or data that materially affects the information
in the original announcement, and that all material assumptions and technical
parameters, underpinning the estimates continue to apply and have not
materially changed. The Company confirms that the form and context in which
the Competent Persons' (Mr Robert Davies) findings are presented have not been
materially modified from the original release.

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
(http://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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