REG - Oriole Resources PLC - Final Results and Notice of AGM
09/03/2023 07:00
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RNS Number : 3646S Oriole Resources PLC 09 March 2023
Oriole Resources PLC
('Oriole' or 'the Company' or 'the Group')
Final Results and Notice of AGM
Oriole Resources, the AIM-quoted exploration company focussed on West Africa,
announces its final results for the year ended 31 December 2022.
Copies of the Company's Annual Report will be posted to shareholders on or
before 30 April 2023. The Company's Annual General Meeting ('AGM') will be
held at 8 June 2023 at the offices of Grant Thornton UK LLP, located at 30
Finsbury Square, London, EC2A 1AG.
Operational Highlights:
· Definition of an independently calculated maiden JORC-resource at the
Bibemi project in Cameroon. The 305,000 Troy ounces ('oz') gold ('Au')
Inferred resource, grading 2.19 grammes per tonne ('g/t'), is the first
JORC-Resource reported for orogenic gold in Cameroon and is supported by a
further JORC-compliant Exploration Target estimated to be up to 148,000 oz at
grades of 1.10 - 2.10 g/t Au;
· Early-stage soil sampling on the Eastern CLP licences, forming part of
the Central Licence Package ('CLP') project in Cameroon, has identified
multiple gold-anomalous zones, including a 12.5 kilometre ('km') anomaly
within the Mbe licence. Recent rock-chip sampling of quartz veins and their
host rocks at Mbe have also returned grades of up to 134.10 g/t Au;
· Identification of anomalous lithium ('Li') in soils on the Ndom
licence, also in the Eastern CLP, is associated with a pegmatite-bearing
granite outcrop. The Group has successfully applied for and been granted a
further 499 kilometres squared ('km(2)') licence, Gamboukou, contiguous to
Ndom, and expected to exhibit the same Li-bearing granite;
· At the Senala project in Senegal, IAMGOLD Corporation ('IAMGOLD')
confirmed that it had met the expenditure requirements to exercise its option
to acquire an initial 51% interest in Senala, and continued its exploration
expenditure with a view to completing up to a further US$4 million ('M')
expenditure to earn up to a 70% interest in the project by February 2024;
· In December 2022, IAMGOLD announced the conditional sale of its
interest in Senala to Managem Group ('Managem'), a North African-based mine
developer and operator, as part of a wider deal that will also see Managem
take ownership of IAMGOLD's Boto mine-development project, located to the east
of Senala.
Financial Overview:
· Incoming funds totalling £0.90M have allowed for £0.84M of direct
exploration expenditure in Cameroon, as the Group advanced its projects;
· Operating loss of £0.53M for the year to 31 December 2022 (2021:
£1.44M), an improvement which includes a favourable £1.11M swing in
unrealised foreign exchange movements;
· Loss for the year of £1.56M (2021: loss of £1.56M) inflated by
£1.45M impairment provision against the Company's holding in Thani Stratex
Resources, a legacy asset. The impairment provision has no cash-flow
implications;
· Administrative expenses increased to £1.18M (2021: £1.08M).
Tim Livesey, CEO of Oriole, commented:
"We are pleased to celebrate yet another year of exploration success in
Cameroon in 2022.
"The drilling programme at the Bakassi Zone 1 target on the Bibemi licence,
led to the delivery of Oriole's maiden JORC compliant Resource in Cameroon. We
were particularly pleased by the high level of conversion from the early JORC
Exploration Target to JORC Inferred Resource, and also by the robust grade of
the resource, giving a first pass estimate of 305,000 oz at 2.19 g/t Au.
"This maiden resource has given us confidence that the Bibemi licence area has
ample potential to host a much more significant resource, as the Bakassi Zone
1 deposit is open ended along strike to the northeast and at depth, and there
are three additional gold targets within a 3 km footprint, leading to the
possibility of developing a multi-pit mine with a central processing
facility.
"An excellent result for Oriole and for Cameroon, opening the focus for
orogenic gold deposits in the country.
"Elsewhere in Cameroon, work on the Eastern CLP has also shown great progress,
with the development and early assessment of several gold anomalous drainage
basins. Soil sampling and mapping has led to the development of several
significant and sizeable gold targets, the largest of which stretches over
12.5 km. Early assessment of these gold-in-soil anomalies appears to support
our hypothesis that the CLP hosts a gold corridor, some 15 km wide and up to
70 km long, in which there is the potential to host multiple gold deposits.
"This is a very encouraging result for Oriole, as it confirms our proposition
that this area of Cameroon is a new gold district. Previously un-explored, we
have only just begun to lift the lid on the opportunities in this area and are
pleased to be heading into 2023 with firm targets developing for a follow up,
prospect-wide drill programme.
"Cameroon has also delivered some positive surprises in other commodities,
with the identification of lithium anomalism on the CLP. First identified
during our early multi-element stream and soil sampling programmes, follow up
work is ongoing to confirm whether the host granitoids and pegmatites could
form a source of hard rock lithium. A solid addition to the opportunity in
Cameroon, we will be following up on these areas in 2023 and have also
applied, and been granted, an extensional licence to capture more of this
anomalism to the southeast of the current CLP footprint.
"Cameroon is therefore continuing to develop and deliver success after success
for Oriole, vindicating our decision to enter into this new frontier for gold
exploration.
"Delays in access to the three licences in the Western CLP have continued but,
with the pragmatic support of the Ministry, we have requested their temporary
suspension, pending the resolution of some concerns raised by owners of an
international hunting concession in the area. In the meantime, we will
continue to focus our efforts on the Eastern CLP.
"Elsewhere in the Group, work in Senegal on the Senala licence by our partner
IAMGOLD, and on the asset realisation programmes in Turkey, continued. As we
reached the end of the year, IAMGOLD informed us of their wish to sell their
interest in the Senala licence as part of a West Africa-wide divestment
strategy. We are currently in discussions with IAMGOLD and Managem Group as to
the effect of the transaction and the timing of further exploration at Senala.
"The success we are having in Cameroon is hugely disconnected from the value
the market is ascribing to those assets, and to Senala. At the current share
price we believe we are more likely to see a better reflection of our value by
looking for finance at the project level wherever possible, and that is what
we are doing, alongside the continued efforts to realise value from the legacy
assets."
Chairman's Statement
As 2021 came to a close, the world drew in its collective breath and hoped for
a good 2022, surely it couldn't be worse than the previous two years. However,
as Covid restrictions in the West eased, the war in Ukraine began with not
only devastating scenes on the news each evening but slowly the realisation of
the effect of energy disruptions in Europe adding to the already growing rates
of inflation seen throughout the western hemisphere. Central banks increasing
interest rates on a monthly basis in an effort to curb rising costs appeared
to have little effect in the early days as inflation appeared not to be driven
by demand but rather by supply issues that remained from Covid, the continuing
shutdowns enforced within China and the effects of the Ukraine war. Why do I
mention this global disruption? Well, with this global uncertainty, one would
expect to see a rising gold price - which often affects the sentiment of
investors in junior mining stocks - but until the beginning of 2023, the gold
price remained unaffected by events and indeed fell for much of the year,
touching US$1,640/oz in November. The junior gold exploration end of the AIM
market has remained in the doldrums, the ugly sister to lithium and other
"green" metals. However, since the beginning of 2023, we have seen an uptick
in the price of gold, with it now trading at above US$1,800 during the early
months of 2023 with many commentators predicting a resurgence in the gold
price this coming year.
In the midst of this mayhem, Oriole has achieved some outstanding results. The
drilling mid-way through the year at our Bibemi gold project in Cameroon
provided support for a JORC compliant Inferred Resource of 305,000 ounces of
gold (at a gold price of US$1,800/oz). This being the first ever JORC resource
produced in Cameroon for orogenic gold and achieved within 19 months of the
first ever drill hole on the licence. Not only does this underline the depth
and quality of experience within our small team but the significant potential
for gold in Cameroon, a country where little to no hard rock gold exploration
has ever taken place. The maiden Resource at Bibemi has significant potential
to grow and the team is working to identify further drill targets ahead of the
next field season.
Next we have our key area, the CLP project which comprises nine licences
covering 4,091km(2) and is located to the south of Bibemi. Soil sampling
during the year over the five 'Eastern CLP' licences identified a number of
gold-in-soil anomalies, the largest of which was a circa 12.5km-long zone at
the Mbe area. Rock chip samples collected over this area at the end of 2022
have further identified excellent results with seven samples achieving grades
of more than 1.0 g/t Au, and the highest reaching 134.10 g/t Au. Sampling and
mapping of the area will continue through this current year in order to
identify drill targets for the 2023/24 field season. Access to the Western CLP
licences remains an issue but we are working with the government to resolve
this.
In addition to these key areas of "gold" success, whilst undertaking
multi-element analysis of the stream and soil samples, it appears that there
is evidence of lithium bearing pegmatites in the Ndom licence and for this
reason we applied for and were granted the Gamboukou licence, immediately to
the south of Ndom. Work continues on this area and, since the results to date
are encouraging, we are undertaking further investigative work.
Apart from the outstanding results achieved in the year, it is also important
to note that whilst Cameroon is not a well-known gold district such as other
West African countries, which have a plethora of mining contractors and
service providers, it has all the geological hallmarks of one and does offer
us excellent infrastructure with roads, power and water all close by to each
of our licence areas. This will have a significant positive impact on capital
required for the development of any assets in the future.
As the first mover in Cameroon, we have managed to acquire a world-class land
package and we are working with our partner BEIG3 and the government to
develop the mining industry in Cameroon. To that end, I would like to say
how sorry we were to learn of the sad, untimely death of the Minister of Mines
Mr Ndoke, who passed away in January of this year and we offer our condolences
to his family and friends. We have a good working relationship at every level
within the Ministry and we look forward to continuing to work closely with the
Ministry team.
Turning next to Senegal, at the Senala licence in the south east of the
country, IAMGOLD has met its first expenditure commitment to earn a 51%
interest in the licence and has entered into the second phase of the earn-in.
At the end of December, IAMGOLD announced its intention to sell a package of
its West African investments to Managem Group, a North African-based gold
developer and operator. Included within the sale package is IAMGOLD's share of
the Senala licence. With the sale yet to be completed, discussions are
on-going with IAMGOLD regarding the work programme to be undertaken during
this interim phase of the sale process. Work undertaken during the year
included an auger programme of approximately 10,000m, which continued to
highlight the extent and prospectivity of the Faré targets in the north of
the licence. Prior to the joint venture with IAMGOLD, the Stratex EMC joint
venture had undertaken a significant amount of work over the licence which
supported our JORC compliant inferred resource calculation of 155,000oz of
gold. This, we believe, is only a representative sample of the potential
resource, at what is one of three targets at Faré and one of five prospects
within the licence.
I will not dwell long on our legacy assets other than to say that work
continues on their monetisation. We are ever hopeful that value will be
achieved but, based on experience, it is unwise to put a timeline on the date
of that achievement, as illustrated by the length of time for both the NASDAQ
listing of Elephant Oil, and the completion of the EIA for the Muratdere
project in Turkey. However, the team will continue with their efforts to push
these assets through to a satisfactory conclusion.
After the positive comments on results achieved during the year, I must
address our share price. When I joined the Company in February 2022, the share
price was 0.34p, it is now in the region of 0.14p despite the excellent
results noted above. Part can be blamed on the economic uncertainty of the
markets and the gold price, and it is true that most small cap gold companies
are experiencing tough times. However, it is obvious that the market continues
to price in further equity raises which has compounded these other factors and
led to a considerable negative effect on our share price. As a personal
investor at 0.34p, 0.30p, 0.18p and 0.12p, I recognise the pain and can
understand the frustration of many of our investors especially those who
regularly contribute to the share chat platforms. Having read the recent
contributions I can offer long term and short term shareholders the following
observation, in over 30 years in the resource sector, I can truly say that I
have never met such a hard-working, diligent and competent team as that at
Oriole and whilst I too dislike dilution unfortunately, equity raises are
often part of the funding requirement of a junior company. However, we are
doing our utmost to seek value elsewhere in order to minimise the requirement
for equity and I would ask for your continued patience as we endeavour to seek
value within our asset portfolio in order to achieve a better share price for
all.
Our outlook for 2023 is one of building on the achievements of past years. The
work programmes, which have already commenced in Cameroon, will allow for the
identification of drill targets towards the end of the year at both Bibemi and
CLP and the value of our on-going interest in Senala will become better
defined. Work will continue to attract investors into our Company, which
offers such a tantalising entry into a new gold frontier and relationships
will continue to be built upon with our partners both old and new.
Along those lines, I would like to touch briefly on the quality of our
advisers who have ably supported us during this past year. Our nominated
adviser of many years, Grant Thornton, always provides good, sensible advice,
and our auditor, PKF Littlejohn, offers practical and pragmatic solutions to
accounting issues. During the year we have supplemented our UK legal advisers,
Edwin Coe, with Gowlings, who have specialised mining knowledge, and our PR
advisers, BlytheRay, continue to deliver excellent communications advice
tailored for the small cap mining market. We changed our broker towards the
end of the year to SP Angel as we believe that they offer the depth required
in the mining sector - that said, I would like to extend our thanks to Shard
for their past efforts on our behalf.
The Company's AGM is scheduled for 8 June 2023 at the offices of Grant
Thornton UK LLP, 30 Finsbury Square, London, EC2A 1AG, and I would encourage
all shareholders to attend. The Company will host an on-line question and
answer session in the days leading up to the AGM and further details on this
will be provided in due course.
Finally, I would like to offer my thanks to the small but hardworking Oriole
exploration team in the field; our close partners at both EMC in Senegal and
BEIG3 in Cameroon; the governments of both host countries for welcoming us to
invest and do business in their country; my fellow board members and the small
UK administration and finance team and last but certainly not least our
shareholders whose continued patience and understanding I gratefully
acknowledge.
Eileen Carr
Non-Executive Chair
8 March 2023
Extracts from the Strategic Report
Principal Activities
The principal activity of the Group is the exploration and development of gold
and other high-value base metal projects.
Strategic approach
The Board's strategy is to establish the Company as a leading value-adding
project-generator in our chosen mineral specialisations and in our geographic
areas of operation. The Board seeks to acquire exposure to highly-prospective
districts, primarily in West Africa, and the Group has developed a first-mover
position in Cameroon, an exciting new frontier for gold-exploration. The Board
aims to develop a portfolio of projects that cover a range of mineral deposits
across multiple jurisdictions, thus mitigating sovereign, technical and
operational risks.
The Group finances its activities through the monetisation of more advanced
projects and through periodic capital raisings.
Organisation overview
After a full refresh of the Board in 2018, the 2021 promotion of Claire Bay to
Executive Director for Business Development and Exploration and the
appointment of Eileen Carr as Chair in 2022, the Board has a proven track
record of success in both mineral exploration specifically and the AIM market
generally. The Board is ably supported by a management team that, for many
years, has delivered successful exploration projects.
Business performance
2022 Operations
The Group's main operations are split between active exploration projects in
Cameroon, partner exploration activities in Senegal, and the management of its
investment and royalty positions.
Active Exploration projects
The primary focus for the Group's own exploration activities is its position
in Cameroon.
Bibemi
At the Bibemi licence in the North of Cameroon, following the maiden drill
programmes in 2021, exploration continued with the completion of Phase 3 and
Phase 4 diamond drilling at the Bakassi Zone 1 prospect area. Phase 3,
focussed on testing the sub-vertical shear veins, also confirmed a secondary
sub-horizontal mineralised component that was more specifically targeted by
vertical drill holes during Phase 4 drilling. The intersection planes between
the two vein sets were proposed as targets for assesing the potential for
broader zones of mineralisation within the system. This theory was confirmed
through the delivery of some of the widest mineralised intersections to date
at Bakassi Zone 1, including 14.80m at 4.27 g/t Au and 7.70m at 2.74 g/t Au
(drilled widths), both from hole BBDD050.
The evidence from these additional core intersections continued to support the
team's structural interpretation of the Bakassi Zone 1 prospect and enabled
the independent estimation of an initial JORC compliant Exploration Target for
the prospect of between six million and eight million tonnes at grades ranging
from 1.50 to 1.70 g/t Au for between 290,000 and 440,000 oz Au.
In December 2022, following a confirmatory visit to site by the independent
consultants, they upgraded a significant proportion of the Bakassi Zone 1
Exploration Target to a maiden JORC Inferred Resource of 305,000 oz grading
2.19 g/t Au. Oriole believes this is the first JORC compliant gold resource
published for projects in Cameroon, confirming its belief that Cameroon is a
new emerging destination for orogenic gold exploration. The remainder of the
Exploration Target that wasn't upgraded still stands at 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.
This Exploration Target is along strike of the Resource in areas of the
deposit where there is currently insufficient sample support to be classified,
under JORC, as Inferred Resource. With infill drilling it is hoped that the
size and confidence level of the existing Resource will be increased to
incorporate some of the additional ounces.
In addition to the extension of the drilling campaigns, ground magnetics were
carried out on the licence, with a focus on Bakassi Zone 1 and the three
associated mineralised prospect areas; Bakassi Zone 2, Lawa West and Lawa
East. Results from this programme gave additional indications of controls on
the structural interactions between the prospects and will enhance further
targeting during 2023. As part of the Phase 4 drilling programme at Bibemi, a
single hole was drilled at Lawa East and delivered 3.00m grading 12.30 g/t Au.
This highlights the significant potential for further resource definition at
the project.
Wapouzé
At Wapouzé, following a review of the trenching data and an interrogation of
all historical data, the prospectivity for gold appears to be lower than at
Bibemi and so the intention is for exploration to be refocussed on the licence
to cover an opportunity which has been identified for dimension stone and
cement production materials, subject to a change of substance application
being approved by the Ministry of Mines. Discussions with suitable local
parties are planned for 2023.
Central Licence Package
Covering Paleo-Proterozoic to Neoproterozoic (including Pan-African) age
rocks, well-known hosts for orogenic gold deposits both in West Africa and
worldwide, the CLP licences were initially targeted by the Company's technical
team due to their apparent proximity to the dominant regional shear corridor
associated with the Tcholliré-Banyo Shear Zone ('TBSZ'), a major
southwest-northeast-trending splay off the larger-scale Central African Shear
Zone. The TBSZ and its associated shears, thrusts and faults are thought to be
one of the most significant structural controls for gold and other
mineralisation in the region.
With the grant of the initial eight licences in the package in February 2021,
follow-on work to the early stream sediment sampling programmes has continued
to focus on the five licences designated as the Eastern CLP (Tenekou,
Niambaram, Pokor, Ndom and Mbe). In November 2021, the Company commenced
semi-regional soil sampling that was completed over six grids in total. Five
of the grids were designed to target the source of the stream-sediment
anomalism identified during the previous season. Results confirmed anomalous
gold in all five licences and have delineated multiple 2-3km long gold-in-soil
anomalies across the Ndom, Pokor and Niambaram licences, as well as a broad
anomalous zone within the Mbe licence, where en-enchelon,
structurally-controlled trends are now confirmed to occupy a cira 12.5km long
by 3km wide corridor. Best results include 838 parts per billion ('ppb') Au
(0.84 g/t Au), 520 ppb Au and 463 ppb Au.
Geological mapping over the Mbe soil anomalism, on a 200m line spacing, has
identified brecciated quartz veins (hosted within strongly altered granitic
units) found sub-cropping/outcropping within the western part of the circa
12.5 km anomalous zone. Results from rock-chip samples taken during Q4-2022
have returned multiple high-grade values, including 134.10 g/t Au and 131.80
g/t Au.
On the basis of the positive soil-sampling results at Mbe, the Company took
the opportunity to expand its position in Cameroon by applying for a further
licence immediately to the east of, and contiguous with, the existing CLP
footprint and therefore the 12.5 km gold-in-soil anomalism at Mbe. The Maboum
licence application, which covers an area of 487 km², has been formally
registered by the Ministry of Mines (although is not yet approved) and is
available to view on the Cameroon Mining Cadastre.
The results to date appear to support the team's hypothesis that the CLP area
is host to a wide (15 to 20 km) corridor of gold mineralisation, stretching
along a approximate 70 km-long segment of the TBSZ. This is further supported
by the publication, in December 2021, of a gold prospectivity map of the area
generated by the World Bank-funded PRECASEM programme, with work completed by
BRGM (France's public reference institution for the management of subsurface
resources). These maps identify the entirety of the CLP footprint as a key
area for gold prospectivity in Cameroon.
During routine interrogation and interpretation of the CLP datasets, an area
of apparent lithium anomalism was identified in geochemical datasets from the
2021/2022 stream and soil programmes on the Ndom licence. Follow-up work to
identify the potential for lithium-bearing pegmatites has been scheduled for
the 2023 field season and an additional licence, Gamboukou, immediately
adjoining the Ndom licence and offering potential for further pegmatite
targets, was secured in November 2022.
Senala
In Senegal, our earn-in partner at the Senala licence, IAMGOLD, continued to
explore at the northernmost Faré prospect, completing its 'First Option' in
February 2022 and meeting the expenditure requirements to obtain a 51%
ownership in the project. Exploration through 2022 continued to be focussed at
Faré, with an expansive auger drilling programme designed to test for
additional anomalism outside of those areas already identified and drilled at
the Faré North, Faré South and Faré Far South targets. This programme
identified significant new gold and arsenic anomalism, exhibiting the same
dominant north-easterly trend as seen at the existing Faré prospects.
In December 2022, IAMGOLD announced its intention to sell its interests in a
package of West African assets, including its beneficial interest in the
Senala licence, to Managem Group, a North African-based mine developer and
operator.
Investment and royalty positions
The Company has a long history of gold and base metal exploration success.
This history has left it with a valuable portfolio of legacy assets throughout
East Africa and Turkey, which are the subject of an on-going asset realisation
programme.
Two of these assets, a 24.92% holding in Thani Stratex Resources ('TSR') and a
9.21% holding in Thani Stratex Djibout ('TSD'), arise from a legacy
joint-venture agreement between the Company, whilst under previous management,
and Thani Ashanti. TSD became a standalone vehicle in late 2019 and is now
funded and managed independently of TSR.
The investment in TSR covers the Hodine licence in Egypt that hosts the Anbat
and Hutite projects. In Q4-2021, operation of this project was taken over by
private group Red Sea Resources ('RSR'), which acquired an initial 7% interest
and has spent in excess of US$2.2M to earn a potential 85% interest in the
Hodine licence. Disappointingly, the targets did not deliver the required
level of commerciality as dictated by the new mining laws in Egypt and so in
October 2022, RSR took the decision to exit its earn-in position. With the
licence due for transfer to exploitation status or relinquishment in December
2022, the decision was taken by the TSR shareholders to allow RSR to close
operations, relinquish the licence and hand back the asset to the Egyptian
authorities. The asset values attributable to the TSR holding have been
provided for in these financial statements.
At TSD, exploration is focused on three primary epithermal gold projects in
Djibouti, namely Pandora, Assaleyta and Hesdaba, with African Minerals
Exploration & Development Fund III ('AMED Fund lll') having taken over
operational control in 2019. Following initial encouraging results, progress
at the projects has been slow during 2021 and 2022. However, the Board still
firmly believes in the potential of the Djibouti licences and so looks forward
to further updates in due course.
Following the closure of the Turkish exploration office, the Group has put in
place arrangements to manage its interests in Turkey, with potentially US$1.6M
and TL3.75M (together, £1.5M) to be collected from the agreements that are in
place with former partners. At the Group's former Karaaǧaç gold project in
Turkey, pursuit of the US$425k owed by the operator, Anadolu Export
('Anadolu'), is still ongoing. The interim injunction against Anadolu
continues to be in place. Turkish justice has moved slowly but it is moving in
the right direction. During the year, the Group managed to bring the parent
company, Odaş Electrik, into the case and they have been forced to submit a
bond to the Turkish courts amounting to US$250k in order to have permission to
defend the case. The Group continues to be confident it will win the full sum
due, plus damages and costs. Following the sale of a royalty right to Anadolu
in 2020, the Group is also contingently owed US$250k from Anadolu should the
Karaaǧaç project receive Environmental Impact Assessment ('EIA') approval
and move to mine construction. The Group continues to monitor progress on this
and has retained the right to take the royalty back if Anadolu defaults on
that payment.
The Group is also awaiting news of a debt owed by NTF Insaat Ticaret Ltd Sti
('NTF'), a former partner in Turkey, who defaulted on tax payments that were
originally due in 2017. In order to ensure compliance with Turkish tax laws,
the Group's previous management made a payment of US$960k in 2017, and the
current team is now trying to recover these funds. However, the most likely
avenue of repayment is via a court issued payment order, which is denominated
in Turkish lira; the amount recoverable has depreciated significantly since
2017 and now stands at approximately US$200k. Progress on this has been held
up by a preceeding case involving NTF but the Board hopes for a resolution of
that case in the near future upon which event the payment order will be served
on NTF.
Meanwhile, work continued at the Hasançelebei project. The Group is due to
receive US$500k from its partner Bati Toroslar when this project passes EIA
stage, and a further US$220k once mine construction commences.
At the Muratdere copper project in northern Turkey, the Company holds a 1.2%
net smelter return royalty position. The EIA Report for this project has been
submitted to the State Authority by Muratdere Madencilik, and was approved by
the State in August 2022. There is currently a lawsuit brought by third
parties against the State for the grant of EIA. Oriole has engaged with a
number of royalty companies with regards to the sale of its Royalty rights,
and believes successful confirmation of the EIA will prove to be a trigger for
a sale of its Royalty rights.
Financial Review
Whilst the loss for the year equalled that of 2021, at £1,569k (2021:
£1,569k) this disguises several significant fluctuations in determining how
that number was finally arrived at. The most significant factor was the
impairment in the value of our holding in TSR, following its relinquishment of
the Hodine licence in Egypt and the decision to dissolve the company. This
relinquishment, over which we had very limited influence having been in a
minority position for many years, resulted in a £1,449k write off to our
profit and loss account, equating to 92% of our loss for the year.
In areas which are more directly under our control, administration expenses
rose 9% to £1,182k (2021: £1,083k), reflecting the establishment of an
administration team at Cameroon, and more travel and legal fees as the
Director's pushed ahead with asset realisation efforts in Turkey and
elsewhere. With the Turkish office now closed, the Group's focus is very much
on our growing position in Cameroon, and having a local team established means
the Company is well placed to deal with events on the ground more proactively.
Included within Administration costs is the grossed-up value of the shares
that the Directors have been taking in lieu of salary for a number of months
during the year. Whilst shares to the value of £57k were issued to the
Directors in lieu of net pay, tax still falls due upon the issue of the
shares, with £37k of tax on non-cash payments included in administration
expenses.
Within operating profit, other income rose to £654k in 2022, from a loss
position of £361k. Much of this £1,1015k swing relates to foreign exchange
fluctuations on our Euro denominated assets, such as the Senala licence in
Senegal. The 6% strengthening of the Euro against Sterling through 2022, after
a comparable weakening in 2021, gives rise to a £539k gain. Gains were also
achieved in Turkey, with the recovery of licence deposits, collection of
trading debts from the 2021 consultancy business and the sale of a small
antimony royalty contributing £44k of income. In addition the sale of fully
written down fixed assets in Senegal brought £78k of income.
The other significant profit and loss movement was at the tax level, where the
exceptionally busy 2021 field season enabled a research and development tax
credit reclaim of £403k (2021: £38k) early in 2022, a significant uplift on
the 2021 tax claim which was based on the Covid-19 affected field season of
2020. Work is underway to submit the 2022 tax computations to enable a further
reclaim, although the level of tax credit achieved in 2022 is unlikely to be
repeated.
The most significant financial issue in 2022 has been the state of the
financial markets, especially in the junior exploration sector. Almost without
exception, our peer group has seen declining share prices, as the economic
uncertainty generated by, amongst other things, the war in Ukraine, has
impacted the availability of funds, both for fund raises and in the secondary
market. Consequently, the remarkable progress shown by our geological teams in
Cameroon has yet to be reflected in the share price. Ongoing efforts to
realise legacy assets and find ways of releasing and re-directing available
funds into progress in Cameroon continue to be the Board's top priority.
In 2022, the Company raised a total of £952k from the issue of equity and the
ongoing Director salary sacrifice scheme, and spent £842k on advancing the
projects in Cameroon. Equity raises in these market conditions are painful for
all shareholders, including Directors, but the Board remains convinced that
progress in Cameroon will eventually be recognised by the markets.
Tim Livesey
Chief Executive Officer
8 March 2022
Financial Statements
Statement of consolidated comprehensive income
Year ended 31 December 2021
£'000
Year ended 31
December 2022
£'000
Continuing operations
Administration expenses (1,182) (1,083)
Other profits/(losses) 654 (361)
Operating loss (528) (1,444)
Financial income 5 -
Share of losses and impairment of associates (1,449) (30)
Loss on change of ownership interest - (133)
Loss before income tax (1,972) (1,607)
Income tax credit 403 38
Loss for the year (1,569) (1,569)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Exchange differences on translating foreign operations (100) 44
Other comprehensive income for the year, net of tax (100) 44
Total comprehensive loss for the year (1,669) (1,525)
Loss for the year attributable to:
Owners of the Parent Company (1,616) (1,687)
Non-controlling interests 47 118
Loss for the year (1,569) (1,569)
Total comprehensive loss for the year attributable to:
Owners of the Parent Company (1,716) (1,643)
Non-controlling interests 47 118
Total comprehensive loss for the year (1,669) (1,525)
Earnings per share for losses from continuing operations attributable to the
equity holders of the Company (expressed in pence per share).
- basic and diluted (0.07) (0.10)
Statement of consolidated financial position
As at 31 December 2021
As at 31
December 2022
£'000 £'000
ASSETS
Non-Current Assets
Property, plant and equipment 33 48
Intangible assets (note 5) 10,559 9,376
Investments in equity-accounted associates (note 3) - 1,449
Financial assets held at fair value through other comprehensive income (note 395 395
4)
Trade and other receivables 440 394
11,427 11,662
Current Assets
Trade and other receivables 196 137
Cash and cash equivalents 507 1,361
703 1,498
Total Assets 12,130 13,160
EQUITY
Equity attributable to owners of the Company
Share capital 6,929 6,200
Share premium 24,980 24,758
Other reserves 1,513 1,606
Retained earnings (21,299) (19,838)
Total equity attributable to owners of the Company 12,123 12,726
Non-controlling interest (241) (133)
Total Equity 11,882 12,593
LIABILITIES
Non-Current Liabilities
Employee termination benefits - 22
Current Liabilities
Trade and other payables 248 545
Total Liabilities 248 567
Total Equity and Liabilities 12,130 13,160
Statement of consolidated changes in equity
Attributable to owners of the Company Non-Controlling Interest
Share Premium Retained earnings
Share Capital Other Reserves Total Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2021 5,667 22,862 1,591 (18,187) 11,933 (251) 11,682
Comprehensive income for the year:
- loss for the year - - - (1,687) (1,687) 118 (1,569)
- other comprehensive income - - 44 - 44 - 44
Total comprehensive income for the year
- - 44 (1,687) (1,643) 118 (1,525)
Issue of share capital net of expenses 533 1,896 - - 2,429 - 2,429
Share-based payments - - 7 - 7 - 7
Share option exercised - - (34) 34 - - -
Share options expired - - (2) 2 - - -
Total contributions by and distributions to owners of the Company
533 1,896 (29) 36 2,436 - 2,436
Balance at 31 December 2021 6,200 24,758 1,606 (19,838) 12,726 (133) 12,593
Comprehensive income for the year:
- loss for the year - - - (1,616) (1,616) 47 (1,569)
- other comprehensive income - - (100) - (100) - (100)
Total comprehensive income for the year - - (100) (1,616) (1,716) 47 (1,669)
Issue of share capital net of expenses 729 222 - - 951 - 951
Share-based payments - - 8 - 8 - 8
Share options expired - - (1) - (1) - (1)
Transfer between reserves - - - 155 155 (155) -
Total contributions by and distributions to owners of the Company 729 222 7 155 1,113 (155) 958
Balance at 31 December 2022 6,929 24,980 1,513 (21,299) 12,123 (241) 11,882
Statement of consolidated cash flows
Year ended
31 December 2021
Year ended
31 December 2022
£'000 £'000
Cash flow from operating activities:
Net cash used in operating activities (1,305) (1,072)
Cash flow from investing activities:
Purchase of property, plant and equipment (10) (15)
Purchase of intangible assets (842) (1,778)
Tax received 403 46
Interest received 5 -
Net cash used in investing activities (444) (1,747)
Cash flow from financing activities:
Net funds received from issue of shares 895 2,429
Net cash generated from financing activities 895 2,429
Net decrease in cash and cash equivalents (854) (390)
Cash and cash equivalents at beginning of the period 1,361 1,751
Cash and cash equivalents at end of the period 507 1,361
Notes to the consolidated financial statements
1. Basis of preparation
The financial statements have been prepared in accordance with IAS-adopted
international accounting standards, IFRIC interpretations and those parts of
the Companies Act 2006 applicable to companies reporting under IFRS. The
financial statements have been prepared under the historical cost convention
as modified by the measurement of certain investments at fair value and have
been prepared on a going concern basis.
The financial information set out in this announcement does not constitute the
Group's statutory accounts for the year ended 31 December 2022 or the year
ended 31 December 2021 under the meaning of Section 434 of the Companies Act
2006 but is derived from those accounts. Statutory accounts for the years
ended 31 December 2022 and 31 December 2021 have been reported on by the
Independent Auditors. The Independent Auditors' Reports on the Annual Report
and Financial Statements for 2022, was unmodified and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006, but did include a
material uncertainty in relation to going concern. The Independent Auditors'
Reports on the Annual Report and Financial Statements for 2021, was unmodified
and did not contain a statement under 498(2) or 498(3) of the Companies Act
2006, but did include a material uncertainty in relation to going concern.
The statutory accounts are available at www.orioleresources.com and will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting. The statutory accounts for the year ended 31 December 2021 have been
filed with the Registrar of Companies.
It is the prime responsibility of the Board to ensure the Company and the
Group remains a going concern. At 31 December 2022 the Group had cash and cash
equivalents of £507k and no borrowings. Having considered the prepared
cashflow forecasts, likely availability of investor support, the prospects for
asset disposals, and Group budgets, the Directors consider that they will have
access to adequate resources in the 12 months from the date of the signing of
these financial statements. As a result, they consider it appropriate to
continue to adopt the going concern basis in the preparation of the financial
statements. There can be no assurance that the cash received from fund raises
and asset sales will match the Board's expectations, and this may affect the
Group's ability to carry out its work programs as expected. As noted above, in
the Audit Report for the year ended 31 December 2022 the auditors have made
reference to going concern by way of a material uncertainty.
2. Segment reporting
The Group's main operations are located in Turkey, East Africa and West
Africa. The Group's head office is located in the UK and provides corporate
and support services to the Group and researches new areas of exploration
opportunities. The management structure and the management reports received by
the Directors and used to make strategic decisions reflect the split of
operations.
a) The allocation of assets and liabilities by segment is as follows:
Exploration UK support & other Group
Turkey East Africa West Africa Total
£'000 £'000 £'000 £'000 £'00
0
At 31 December 2022
Intangible assets - - 10,559 - 10,559
Property, plant and equipment - - 23 10 33
Cash and other assets 30 835 173 500 1,538
Liabilities (1) - (69) (178) (248)
Inter-segment (3,304) - (3,341) 6,645 -
Net assets/(liabilities) (3,275) 835 7,345 6,977 11,882
Exploration UK support & other Group
Turkey East Africa West Africa Total
£'000 £'000 £'000 £'000 £'000
At 31 December 2021
Intangible assets - - 9,376 - 9,376
Property, plant and equipment - - 36 12 48
Investment in associate companies - 1,449 - - 1,449
Cash and other assets 81 789 79 1,338 2,287
Liabilities (43) - (20) (504) (567)
Inter-segment (3,281) - (2,849) 6,130 -
Net assets/(liabilities) (3,243) 2,238 6,622 6,976 12,593
b) The allocation of profits and losses for the year by segment is as
follows:
Exploration UK support & other Group
Turkey East Africa West Africa Total
£'000 £'000 £'000 £'000 £'000
2022
Administration expenses (39) - (183) (952) (1,174)
Depreciation charge - - (1) (7) (8)
Other income/(losses) 49 - 79 (8) 120
Share of associate company losses and impairment of associate - (1,449) - - (1,449)
Exchange gains/(losses) 1 - 492 46 539
Inter-segment charges - - (274) 274 -
Income tax - - - 403 403
Profit/(loss) for year 11 (1,449) 113 (244) (1,569)
Exploration UK support & other Group
Turkey East Africa West Africa Total
£'000 £'000 £'000 £'000 £'000
2021
Administration expenses (38) - (114) (922) (1,074)
Depreciation charge (3) - (4) (2) (9)
Other income/(losses) 75 135 - - 210
Share of associate company losses - (163) - - (163)
Exchange gains/(losses) (18) 28 (579) (2) (571)
Inter-segment charges - - (291) 291 -
Income tax (8) - - 46 38
Profit/(loss) for year 8 - (988) (589) (1,569)
3. Investment in equity-accounted associates
Group
2022 2021
£'000 £'000
At 1 January 1,449 1,449
Exchange movements - 28
Share of losses - (30)
Share of losses and impairment provision (1,449) -
Release of impairment provision - 135
Loss on change of ownership interest - (133)
At 31 December - 1,449
The balance at 31 December represents the Company's 24.92% investment in Thani
Stratex Resources Limited ("TSRL") group of companies which was maintained
during the year. However, on 31 December 2022, TSRL relinquished the Hodine
licence in Egypt, the company's only operational asset. Consequently, full
provision for impairment has been made in these financial statements.
4. Financial assets
Financial assets at fair value through other comprehensive income
Group
2022 2021
£'000 £'000
At 1 January and 31 December 395 395
Financial assets at fair value through other comprehensive income comprises an
9.21% investment in Thani Stratex Djibouti Limited.
5. Intangible assets
The Group's Intangible assets comprise entirely of exploration assets.
Group
2022 2021
Cost £'000 £'000
Cost at 1 January 9,376 7,771
Exchange movements 325 (413)
Additions 858 2,018
At 31 December 10,559 9,376
The capitalised cost of the principal projects and the additions during the
year are as follows:
Capitalised cost Additions in year
2022 2021 2022 2021
£'000 £'000 £'000 £'000
West Africa
Senala 6,502 6,177 - 22
Cameroon 4,057 3,199 858 1,996
Total Intangible assets 10,559 9,376 858 2,018 10,490,725
** ENDS **
Competent Persons Statement
The Technical Information relating to Exploration Results has been prepared by
Claire Bay, EurGeol, CGeol, MIMMM, an employee of the Company, who is a
Competent Person as defined by the JORC Code 2012 Edition. The information is
extracted from various source reports. The Company confirms that it is not
aware of any new information or data that materially affects the information
included in the relevant market announcements. The Company confirms that the
form and context in which the Competent Person's findings are presented have
not been materially modified from the original market announcements.
The Technical Information relating to Mineral Resources and Exploration
Targets is based on data compiled by Mr. Robert Davies, EurGeol, CGeol, an
independent consultant to Oriole. Mr Davies is a Director of Forge
International Limited. Mr Davies has sufficient experience that is relevant to
the style of mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as defined in the
2012 Edition of the "Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves". Mr Davies consents to the inclusion in
this presentation of the matters relating to the Mineral Resource Estimate and
Exploration Target for Faré South in the form and context in which they
appear. The Company confirms that the material assumptions and technical
parameters for resource estimate continue to apply and have not materially
changed.
It is noted that the potential quality and grade of the Exploration Targets
referenced in this report are conceptual in nature. There has therefore been
insufficient exploration to estimate a Mineral Resource for all target areas
reported and it is uncertain whether further exploration will result in the
estimation of a Mineral Resource. The Exploration Targets have been prepared
in accordance with the 2012 edition of the JORC Code.
For further information please visit www.orioleresources.com
(http://www.orioleresources.com) , @OrioleResources on Twitter, or contact:
Oriole Resources PLC Tel: +44 (0)20 7830 9650
Bob Smeeton / Tim Livesey / Claire Bay
BlytheRay (IR/PR contact) Tel: +44 (0)20 7138 3204
Tim Blythe / Megan Ray / Rachael Brooks
Grant Thornton UK LLP Tel: +44 (0)20 7383 5100
Samantha Harrison / George Grainger / 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-listed gold exploration company, operating
in West Africa. It is focussed on early-stage exploration
in Cameroon, where the Company has recently reported a maiden Resource of
305,000 oz Au 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, IAMGOLD is the operator and has the option to
spend up to US$8 million to earn up to a 70% interest. Under the terms of
the Option Agreement, IAMGOLD has met its first commitment by spending US$4
million within an initial four years and has therefore earned an initial 51%
beneficial interest in Senala. 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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