REG - Oriole Resources PLC - Final Results and Notice of AGM
28/03/2024 07:00
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RNS Number : 5997I Oriole Resources PLC 28 March 2024
Oriole Resources plc / Index: AIM / Epic: ORR / Sector: Mining
Oriole Resources PLC
('Oriole' or 'the Company' or 'the Group')
Final Results and Notice of AGM
Oriole Resources (AIM: ORR), the AIM-quoted exploration company focussed on
West Africa, announces its final results for the year ended 31 December 2023
(the 'Period').
Copies of the Company's Annual Report will be posted to shareholders on or
before 15 May 2024 together with notice of the Company's Annual General
Meeting ('AGM') which will be held at 11:00am BST on 24 June 2024 at the
offices of Grant Thornton UK LLP, located at 30 Finsbury Square, London, EC2A
1AG.
Operational Highlights:
· At the Mbe licence ('Mbe') in the Eastern Central Licence Package
('Eastern CLP'), results for a total of 19 channel-chip samples returned
mineralised intervals across all six sample lines, with 11 samples grading
over 1 gramme per tonne ('g/t') gold ('Au'). Best intervals included 5.00
metres ('m') at 2.03 g/t Au and 2.20m at 8.47 g/t Au, with mineralisation
continuing into the wall rock;
· Completion of an earn-in agreement with BCM International Limited
('BCM') in respect of the Bibemi licence ('Bibemi') in Cameroon, which has
seen BCM make a signature payment of US$0.5 million ('M') and will see it
invest up to US$4M into exploration and move Bibemi through the exploitation
licence application phase, in return for up to a 50% interest in the licence;
· Improvement in the independently calculated maiden JORC-resource at
Bibemi to 375,000 Troy ounces ('oz') Au, grading 2.38 g/t in the JORC Inferred
category;
· Completion of a second earn-in agreement with BCM in respect of the
Mbe licence in Cameroon, which has seen BCM make a signature payment of US$1M
and will see it invest up to US$4M into exploration, in return for up to a 50%
interest in the licence;
· IAMGOLD Corporation announced that it had completed the sale of its
interest in the Senala licence ('Senala') to Managem Group ('Managem'), a
Moroccan-based mine developer and operator. Managem has continued to provide
exploration funding under the pre-existing option agreement but has not
reached the expenditure necessary to guarantee Managem a 70% ownership stake
in the licence. Instead, following expiration of the option agreement in
February 2024, Managem will hold an approximate 59% interest in the licence.
Financial Overview
· Administrative expenses reduced by 4% to £1.13M (2022: £1.18M);
· Cash outflow from operations reduced by 59% to £0.53M (2022:
£1.31M) as the Group introduced cash saving measures throughout the Period;
· Loss for the year of £2.27M (2022: loss of £1.57M) inflated by
£0.42M impairment provision against the Company's holding in Thani Stratex
Djibouti, a legacy asset, revaluation of the receivable from Lanstead Capital
Partners L.P. ('Lanstead') at the year-end share price amounting to a fair
value adjustment of £0.65M, and an adverse foreign exchange movement of
£0.79M. These three items have no cash-flow implications.
Tim Livesey, CEO of Oriole, commented:
"2023 was a year of consolidation in a very difficult market for junior
explorers.
"Our early focus in Cameroon was a review and revisit of our exploration
targeting in the Eastern CLP and at Bibemi. In both areas, programmes of
ground geophysical data collection were carried out and, at the Eastern CLP,
further field mapping and sampling was undertaken in order to improve our
understanding of the mineralisation prior to the initiation of the next phases
of work.
"As we continued to see positive support for the concept of a mineralised gold
corridor through the Eastern CLP, in particular with additional exposure of
the mineralised system on the Mbe licence created by some small-scale
artisanal activity, the projects in the Eastern CLP began to attract attention
from a number of international mining groups, ultimately culminating in the
signing of Heads of Terms agreements on both Bibemi and Mbe in November
2023. Definitive agreements for both projects were signed in January 2024.
"These agreements will deliver US$4M of exploration funding for each of the
projects, in addition to a total of US$1.5M in signature payments directly to
Oriole and Resource-definition based success payments.
"At a time when the market capitalisation of the Company sat at around £3M,
these two agreements demonstrated the highly undervalued nature of the
Company, and also reconfirmed the technical capabilities of our team in both
identifying and developing a maiden resource, and identifying a new potential
gold district in Cameroon.
"With a change of our Joint Venture ('JV') partner at Senala, following
IAMGOLD's sale of its West African exploration assets, we also began our
relationship with Managem, who will continue to explore the prospective Faré
targets.
"As we close out the year, we are very pleased to be one of the few junior
explorers carrying out true greenfield exploration in a new jurisdiction, with
cash in the bank and a strong partner funding and advancing exploration at two
of our 11 licences in Cameroon."
Chair's Statement
Dear Shareholder,
As a predominantly gold exploration company, I thought it would be useful to
look at the underlying trends supporting the current increase in the price of
gold which, at the end of 2023 stood at US$2,078/oz compared to the previous
year end of US$1,823/oz. The price of gold has continued to rise this year,
reaching a peak of US$2,203/oz on 20 March 2024. There are several reasons for
this increase in price, the main one being the continued demand for bullion by
Central Banks who made net purchases of 1,037 tonnes ('t') during the year,
being just a little short of the 2022 record. Of this amount, China bought
225t and now holds the largest amount of gold, reaching over 33,000t split
equally between State and private investors. The reason behind this buying is
primarily linked to the geopolitical situation which did not improve in 2023,
with the continuing Russian invasion of Ukraine and now the added conflict in
the Middle East. The People's Republic of China, having seen the sanctions
imposed upon Russia, has reduced its US dollar dependency and, as a
consequence, continues to build its bullion reserves. In a similar fashion,
the BRICS countries have decided to also use bullion as a basis for
international exchange, a role previously held by the US dollar and the
Euro. Many countries now support 'de-dollarisation' and physical gold is
seen as the only guarantee of economic and political independence. It is
therefore likely that Central Banks will continue their demand for bullion.
In addition to this trend away from dollars, the continued break in supply
chains due in part to on-going Panama and Suez situations, has led to an
increase in the cost of goods, which the increased cost of oil and gas has
only aggravated. Although Western governments have managed to curtail the
relatively high rate of inflation experienced in the recent past, there is
some concern that prices will not return to the levels previously seen. As a
consequence, gold, which has always been seen as the top hedging instrument
against inflation, should continue to be prized as an asset to be held and so
one might expect the price to continue its upward trajectory. As with
everything though, nothing is guaranteed in today's economic and political
environment.
The positive news on the gold price was not reflected in the investment
attitude towards the junior exploration end of the London market and Oriole
was faced with an uphill struggle to finance operations throughout the year. I
was happy to invest in the Company in April 2023 and hope that my investment
demonstrated my belief in our assets and our team. In addition to my
investment, the Board of Directors took shares and options in part payment of
their salaries/fees and the extent of these actions has increased the Board's
ownership to 6.6% of the share capital of the Company. I am pleased to report
that our cash position has significantly improved with the signing of the two
agreements with BCM and since year end, we have received signature payments
totalling US$1.5M from BCM and exploration has already begun at both the
Bibemi and Mbe projects.
In addition to the BCM earn-in deals, we also entered an agreement with
Lanstead in August 2023, whereby they bought 930 million shares at a notional
price of 0.19 pence ('p') per share, which was significantly above the then
market price of the shares which stood at 0.15p. The sale proceeds were, in
effect, repaid to Lanstead who then undertook to repay the proceeds in 24
monthly instalments based on the prevailing share price each month. The main
reason for entering into this form of transaction was because the Board
strongly believed that a deal would be struck with the Cameroon assets that
would significantly improve the underlying value of the Company and which
would be reflected in an increased share price. The repayments began in
September and the first four months were, as expected, lower than the
benchmark receipt. However, since the year end, the receipts from Lanstead
have significantly increased, sitting at or above the benchmark amount, and we
are hopeful that results from our exploration efforts will continue to drive
our share price higher.
These transactions mean that our exploration work at Bibemi and Mbe is fully
funded by up to US$4M on each asset and our UK overheads are covered by the
monthly receipts from Lanstead. In addition, the signature payments received
will help to fund our exploration work elsewhere in Cameroon, although we
continue to seek partners for our other licences in both Cameroon and Senegal
in order to defray both costs and risks in our asset portfolio.
Due to the constrained cash position in 2023, exploration throughout the
Period was limited, although we did manage to undertake a geophysical work
programme over Bibemi that has identified further potential areas for
exploration and assisted with the location of drill holes for the upcoming
BCM-funded drilling programme. At Mbe, we also undertook a geophysical survey
and undertook selective rock-chip and limited channel-chip sampling which has
further demonstrated the gold potential in not only the vein but also the host
rock.
In January of this year, BCM undertook a more representative sampling campaign
at Mbe, as part of its due diligence review, and were delighted with the
results achieved thus far, supporting our contention that this is potentially
a new gold frontier in Africa. At Bibemi, we will shortly commence an
approximate 7,000 metre drilling campaign that will test both the existing
gold Mineral Resources Estimate ('MRE') at Bakassi Zone 1, through infill and
extension drilling, as well as at new geophysics targets along strike. The
drilling will hopefully add to the global MRE for the project, which currently
sits at 375,000ozs grading 2.30 g/t Au in the JORC Inferred category.
Should the drilling confirm additional ounces, and subject to the mining
studies proving positive, it is envisaged that the deposit will be mined from
surface as an open pit operation. Our partner, BCM, is ideally placed to
assist with the development of this operation and it is currently our
intention to submit an application for a mining licence over this area during
2024. Infrastructure in the area is conducive to development and capital
expenditure will eventually be focussed on the plant and mining fleet rather
than construction of roads etc.
Meanwhile, the work programme at Mbe will focus on soil and trench sampling
with a view to drilling initial targets during the next dry season. Results to
date from this licence are extremely encouraging and will aid exploration on
our other four licences within the Eastern CLP. Elsewhere, we will continue
our exploration at Gamboukou, to review the lithium potential, continue to
discuss the accessibility of our Western CLP licences, currently under
voluntary suspension, and await the signature of our Wapouzé licence to the
north of Bibemi where there appears to be significant potential for limestone
extraction for cement.
In Senegal, the second option period over the Senala licence has now ended and
Managem appears to have earned in to approximately 59% of the licence; with a
review of the expenditure to confirm this position underway. According to the
original agreement, the next steps include the formation of a JV company to
manage the asset going forward, and the review and approvals for workplans and
budgets. Oriole has the option to contribute or dilute at that stage.
We also continue to pursue sums due in respect of our legacy assets in Turkey
and we will update the market as and when any progress is made.
With the two exploration programmes now underway in Cameroon, and results
expected in the coming months, this is a very exciting time for the Company.
Turning next to our share price, which has continued to fluctuate, hitting a
high of 0.50p in January 2024 from a low of 0.0722p in November 2023, it now
sits at around 0.25p, giving a market capitalisation of £9.7M. I do not
believe this is a fair reflection of the worth of the Company and I am forever
hopeful that the market will reward good results when they begin to arrive. We
shall also continue to seek value enhancing transactions whilst we pursue our
exploration efforts in Cameroon. The current market for junior exploration
companies remains challenging, but we shall continue to persist and I am
confident that positive market sentiment will return.
Before signing off, I must thank the team at BCM who shares our vision for the
potential of a new gold district in Cameroon. This is not my first venture
with Paul List and his team and I am pleased that we are working together
again on two such exciting projects. I would also like to thank the team at
Managem, as I recognise that to integrate a group of assets positioned in
three West African countries is not an easy feat, and I look forward to
working together in order to maximise our value in Senegal.
I would also like to say how glad I am for the continuing support and sound
advice given to the Company by our High Commissioner in Cameroon and
understand that the UK has recently entered into various trade deals with
Cameroon, which can only help with the continued economic development of that
country. Likewise, we are pleased with the help given by the Governments of
both Cameroon and Senegal in moving our assets forward. Our partner in BEIG3
continues to offer enormous assistance with logistics, which has been, and
will continue to be, crucial during this next phase of exploration in
Cameroon. Our partners at EMC have also been of great assistance in helping
with the renewal process for our Senala licence in Senegal.
I must also recognise that our teams on the ground in Cameroon and in the UK
are the bedrock of the Company and I appreciate their efforts during a
difficult period. I look forward to continuing our work together to make this
coming year a success.
Finally, the Board deserves a special vote of thanks as there have been hard
days in 2023 with a heavy workload and little else. I am hoping that now we
are funded with an exciting work programme ahead, 2024 will be a much better
year for us all. Which brings me finally to our shareholders who, I suspect,
are battered and bruised but hopefully now a little more optimistic of a
brighter future. Please be assured that the Board and management are working
extremely hard to make your Company a success and I rather believe that this
year will be the turning point.
Eileen Carr
Non-Executive Chair
27 March 2024
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 and Central 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, project specific investment agreements and through periodic capital
raisings if necessary.
Business environment
The price of gold fluctuated during the year but remained above US$1,800/oz
throughout, and currently sits at a 10-year high. The continued global
uncertainty, with conflict in Ukraine and the Middle East, is expected to
provide continued strong demand for gold during 2024, which is important for
Oriole as its projects move forward towards the mine development phases.
However, a strong demand for gold does not necessarily translate into a good
environment for early-stage gold explorers, and 2023 continued to be a
challenging environment for the junior exploration companies looking to raise
funds via traditional equity placings.
The Board continues to believe that the global demand for gold, and the need
for new resources, will ultimately drive an increased appetite for the main
gold producers to support the activities of junior exploration companies like
Oriole.
We were saddened to hear that Cameroon's Minister of Mines, Industry and
Technological Development, Gabriel Dodo Ndoke, passed away suddenly on the
morning of 18 January 2023. Interim Minister, Dr. Calistus Gentry Fuh has been
appointed, and we have been working effectively with the Minister and his team
throughout the year.
2023 Operations and progress
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. Much of 2023 was dominated by the search for
funding, culminating in reaching an agreement with Lanstead to provide a
two-year equity funding mechanism, and the signing, early in 2024, of two
agreements with BCM in respect of the Group's Bibemi and Mbe projects. These
latter two agreements fulfilled a long-held strategy of attracting
project-level funding as a means to more appropriately reflect the underlying
value of the Group's assets than was being recognised by the overall market
capitalisation of the Group. The Directors continue to look for further
avenues for project-level funding.
Active exploration projects
The primary focus for the Group's own exploration activities is its position
in Cameroon.
Bibemi
In December 2022, the Company reported a maiden JORC-compliant Resource of
305,000 oz grading 2.19 g/t Au for Bakassi Zone 1, one of four prospects at
the project. Since year end, the rising gold price led to an upward revision
of the existing Resource to 375,000 oz grading 2.30 g/t Au (announcement dated
15 January 2024). The MRE remains open at depth and along strike to the
northeast, and there exists significant potential to expand the Resource at
Bakassi Zone 1 and to identify additional resources at the other three
prospects on the licence, Bakassi Zone 2, Lawa West and Lawa East, which are
all located within a few kilometres ('km') of Bakassi Zone 1.
After long-running discussions with BCM, agreement on Heads of Terms was
reached in November 2023 and a full Earn-in agreement signed on 5 January
2024. This provided Oriole with US$500,000 in signature payments and allows
BCM to earn into a 50% ownership position upon completion of US$4M of
investment into the project, and resources-definition based success payments.
This investment will allow the Group to commence Phase 5 drilling at Bibemi in
2024 with a view to increasing the existing Resource and moving towards
submission of an application for an exploitation licence later this year.
Local-level technical studies, including a baseline Environmental Impact
Assessment ('EIA'), have already commenced. The infill ground magnetics
programme completed during Q2 provided more complete and detailed coverage
than the prospect-level data acquired in 2022. This has identified a number of
further targets at Bibemi, two of which will be tested during the upcoming
Phase 5 drilling programme alongside infill and extension drilling at the
Bakassi Zone 1 MRE zone.
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 2022, semi-regional soil sampling over the five Eastern CLP licences
identified multiple 2-3km long anomalies across the Ndom, Pokor, and Niambaram
licences. At Mbe, a c.12.5km long by 3km wide gold-mineralised corridor
('MB01') was identified and during Q4-22, the team completed regolith and
lithological mapping (1:15,000 scale) as well as selective rock-chip sampling
over outcropping rocks, predominantly quartz veins. This work resulted in the
identification of a north-northeast trending corridor comprising sulphide-rich
and locally brecciated quartz veins within strongly altered and mineralised
felsic porphyry host rocks. Selective sampling over outcropping quartz veins
in Q1 delivered grades up to 134.10 and 131.80 g/t Au.
The results to date appear to support the team's hypothesis that the Eastern
CLP area is host to a wide (15 to 20km) corridor of gold mineralisation,
stretching along an approximate 70km-long segment of the TBSZ.
In 2023, the Group focussed its exploration efforts on Mbe, in order to
showcase the potential of the whole Eastern CLP. Analysis of a further 493
soil samples over Grid 6 at Mbe during H1 2023 returned an anomalous sample of
257 parts per billion ('ppb') Au and seems to have identified the
south-westerly extent of the 12.5km long gold-in soil anomaly.
A ground-based geophysics programme has been completed over the entire gold
anomalous zone at Mbe to test the local and regional scale structures at depth
and to help develop the geological model. The survey was conducted by our own
field teams at a line-spacing of 100m and provided high-quality data that has
now been interpreted to assist with drill target identification.
During 2023, minor artisanal pits exposed trench-like profiles at six
locations over a 200m strike length of one of the shear veins at MB01. The
hand-dug workings enabled the collection of channel-chip samples on short 2-5m
wide lines that are approximately perpendicular to the dominant north-east
shear trend and provide a small window into the much wider corridor of
mineralised veins. Results for a total of 19 channel-chip samples (22
including QAQC) returned mineralised intervals across all six sample lines,
with 11 samples grading over 1 g/t Au. Best intervals (using a 0.30 g/t Au cut
off) included; MBTR01: 2.20m at 8.47 g/t Au; MBTR02: 5.00m at 0.90 g/t Au;
MBTR04: 5.00m at 2.03 g/t Au and MBTR05: 2.10m at 3.69 g/t Au.
Mineralisation was returned from a range of host rocks including variably
brecciated shear and extensional quartz veins and altered wall rock. The
highest grade returned from a wall rock sample was 5.94 g/t Au over 0.90m,
within the MBTR05 interval, suggesting the potential for near-surface
bulk-mineable mineralisation.
Late in 2023, the Company's ongoing discussions with BCM in respect of the
Bibemi project grew to encompass project level funding for the Mbe licence,
culminating in a Heads of Terms agreement with BCM being signed in November
2023 and the full Earn-in agreement being signed in January 2024. The Group
has received US$1M as a payment on signature and work has already commenced in
the field in respect of BCM's US$4M investment into exploration at Mbe for
which they will earn a 50% ownership position in the licence, subject to also
making any resource-based success payments that are due. It is anticipated
that exploration success at Mbe will further enhance investment interest in
the other four licences in the Eastern CLP and the Group intends to progress
these licences during 2024, whilst seeking further project-level funding
arrangements.
Lithium
In November 2022, the Company reported that geochemical data from its soil
sampling programmes had identified a lithium-in-soil anomalism at the Ndom
licence (part of the Eastern CLP), with two parallel zones, each extending
over an approximate 9 km strike length and associated with units mapped
regionally as porphyritic granitoid. In the same month, the Company secured
the Gamboukou licence, immediately to the south of Ndom, on the basis of it
having similar lithium-prospective geology.
During H1 2023, the team completed reconnaissance exploration and mapping at
the Ndom and Gamboukou licences, in order to assess their potential to host
lithium-bearing pegmatites, and confirmed multiple pegmatite veins within the
granitoids and the older basement rocks. Sampling programmes continued at Ndom
through the remainder of the year and further work to qualify these areas as
lithium prospects is planned for 2024.
Wapouzé
A review of the historical data in 2022, determined that gold prospectivity at
Wapouzé was lower than that at the Group's nearby Bibemi project but
highlighted the potential for cement-quality limestone within the licence
area. Thirteen out of fourteen rock chip samples returned suitable chemistry
to be classified as high-grade carbonate material, suitable for use within the
cement industry (an industry in Cameroon which is believed to be worth in the
order of £700M per year, largely supported by import), which provided support
for Oriole to request a change of commodity for the licence during the renewal
process. This process is still ongoing but, once granted, Oriole will look to
secure an industrial minerals partner to develop the Wapouzé project through
to exploitation on an expedited basis, from which Oriole will look to secure a
royalty-stream.
Senala
In December 2022, our earn-in partner at the Senala licence in Senegal,
IAMGOLD, announced the pending sale of its West African assets, including its
stake in Senala, to Managem, a Moroccan based mining company. The sale moved
to completion in March 2023 and Managem continued funding of the earn-in on
Senala under the terms of the 2018 Option Agreement (announcement dated 1
March 2018), with the option to earn up to a maximum 70% interest in the
project by February 2024, subject to a total spend of US$8M. The Option
Agreement, has now reached its full term and a review of expenditure is
underway in order to confirm Managem's ownership position, expected to be
around 59%. Discussions regarding the future exploration and
joint-operatorship of the licence are underway.
Investment and royalty positions
The Company has a long history of gold and base metal exploration success.
This history has left it with a potentially valuable portfolio of legacy
assets, which are the subject of an on-going asset realisation programme.
One of these assets, an 8.03% holding in Thani Stratex Djibouti ('TSD'),
arises from a legacy JV agreement between the Company, whilst under previous
management, and Thani Ashanti. Whilst the project is still active, and highly
prospective, progress under the new arrangements has been slow and with
funding for the exploration industry as a whole proving to be very difficult,
the Board has made full provision against the value of this investment, whilst
still remaining hopeful of an eventual return to its shareholders.
The Group remains committed to realising value from its interests in Turkey,
with potentially US$1.6M and Turkish Lira 3.75M (together, £1.3M) 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 although
progress through the courts is painfully slow.
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. Further depreciation of the Turkish Lira against the
Dollar has now reduced this receivable to US$115k.
Meanwhile, work continued at the Hasançelebi 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, but has been subject to an ongoing appeals process.
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 this asset.
Financial Review
As noted earlier, 2023 was a particularly challenging year for junior
exploration funding but the Group has managed to enter 2024 having secured
significant funding for its operational expenses and for the comprehensive
exploration plans in Cameroon. In such challenging times, the Board has
invested into the Group throughout the year, with a direct placing by Eileen
Carr, salary sacrifice schemes (undertaken by the entire Board) running for
most of the year in relation to shares and share options, and the simple
method of deferring salary.
Following discussion with the Group's financial advisors about their
experience of raising funds in 2023, which had seen deep discounting of share
prices in order to attract investment, the Board decided to try an alternative
equity funding route, one which would leverage the potential upside in the
share price that could be foreseen as discussions regarding the introduction
of project-level funders advanced.
Accordingly, the Group entered into an arrangement whereby 930 million new
Ordinary Shares were issued to Lanstead (at a notional value of 0.19p per
share) in exchange for 24 monthly repayments from a 'Sharing Agreement', those
monthly repayments being based upon the prevailing monthly share price and its
variance against a reference price of 0.253p per share. Whilst the mechanics
of the Sharing Agreement are complex, essentially the funds received monthly
are £74k plus or minus a percentage equal to the variance from the reference
price. Whilst complex arrangements like this are unpopular with investors, as
appeared to be proven in the early months post-signature, the Board's belief
that positive news would make the arrangement beneficial to the Group has been
borne out following the completion of the BCM deals. Based on returns received
to date, against the shares to which those returns relate, the average price
per share from the Sharing Agreement is 0.18p at the time of writing,
significantly in excess of what could have been achieved from an equity
placing to the market in 2023. The proceeds of the Sharing Agreement are to be
used primarily to provide funding for the Group, as Oriole continues its
strategy of seeking joint-venture partnerships and project-level financing.
Excess funds will be directed towards exploration spend on the Group's
projects.
The accounting for the Lanstead Agreement reflects IFRS stipulations that such
financial instruments should be 'marked to market' at the Period reporting
date, and so a £652k fair value adjustment arose at the year end and was
recognised as a loss in the statement of comprehensive income, based on the
remaining amounts receivable using the year end share price as a reference.
Such was the impact of the BCM deals on the share price, that 'marking to
market' based on the price one month later, would have seen a fair value
uplift of £471k, instead of a loss of £652k.
This 'marking to market' fair value movement contributed to a Group loss for
the year of £2,269k (2022: £1,569k). Also included in that figure is the
£416k provision made against the debt due from Thani Stratex Djibouti,
following the Board's decision to make full provision against the investment
in TSD. A year-on-year adverse forex movement of £788k on our Euro
denominated assets in Senegal, is the other significant factor in
understanding the movement between the two periods. These three items
contributed to the 'other losses' line of £1,304k (an adverse swing of
£1,958k against the prior year).
In areas which are more directly under our control, administration expenses
fell by 5% to £1,129k (2022: £1,182k), as a result of cost saving measures
implemented to maximise available funds for exploration and minimise monthly
cash burn. Included within the 2023 administrative expenses is an accounting
charge of £182k for 'share based payments', which is a non-cash item required
under IFRS to reflect the potential value of share options issued to Directors
and employees. This figure is inflated from its normal levels, for example in
2022 the charge was £8k, due to the extensive salary sacrifice for share
options scheme implemented during the year, which saved £60k of cash flow in
the second half of the year. Consequently, on a cash basis, cash flows from
operational activities reduced by 59% to £531k (2022: £1,305k).
The Group continues to reclaim research and development tax credits, with
£158k received in the year reflecting 2022's exploration activities. Work is
underway to submit the 2023 tax computations, although the 2022 level is
unlikely to be repeated due to lower levels of exploration during the Period.
The Group enters 2024 in a much stronger financial position than it was in for
much of 2023. With monthly incoming funds from the Lanstead Agreement, and an
excellent partner providing funding on two of our licences in Cameroon, the
Board remains convinced that the share price does not yet fully reflect the
progress that has been made across the Group's portfolio. However, with field
work underway, the prospects for the Group are excellent and hindsight will
show 2023 to have been a difficult but ultimately transformational year.
Tim Livesey
Chief Executive Officer
27 March 2024
Financial Statements
Statement of consolidated comprehensive income
Year ended 31 December 2022
£'000
Year ended 31
December 2023
£'000
Continuing operations
Administration expenses (1,129) (1,182)
Other (losses)/profits (1,304) 654
Operating loss (2,433) (528)
Financial income 6 5
Share of losses and impairment of associates - (1,449)
Loss before income tax (2,427) (1,972)
Tax credit 158 403
Loss for the year (2,269) (1,569)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Exchange differences on translating foreign operations 36 (100)
Change in fair values of other financial assets (395) -
Other comprehensive income for the year, net of tax (359) (100)
Total comprehensive loss for the year (2,628) (1,669)
Loss for the year attributable to:
Owners of the Parent Company (2,221) (1,616)
Non-controlling interests (48) 47
Loss for the year (2,269) (1,569)
Total comprehensive loss for the year attributable to:
Owners of the Parent Company (2,580) (1,716)
Non-controlling interests (48) 47
Total comprehensive loss for the year (2,628) (1,669)
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) (0.07)
Statement of consolidated financial position
As at 31 December 2022
As at 31
December 2023
£'000 £'000
ASSETS
Non-Current Assets
Property, plant and equipment 8 33
Intangible assets (note 4) 10,766 10,559
Financial assets at fair value through other comprehensive income (note 3) - 395
Financial assets at fair value through profit and loss (note 3) 395 -
Trade and other receivables - 440
Total Non-Current Assets 11,169 11,427
Current Assets
Financial assets at fair value through profit and loss (note 3) 593 -
Trade and other receivables 132 196
Cash and cash equivalents 114 507
Total Current Assets 839 703
Total Assets 12,008 12,130
EQUITY
Equity attributable to owners of the Company
Share capital 8,070 6,929
Share premium 25,804 24,980
Other reserves 1,336 1,513
Retained earnings (23,520) (21,299)
Total equity attributable to owners of the Company 11,690 12,123
Non-controlling interest (289) (241)
Total Equity 11,401 11,882
LIABILITIES
Current Liabilities
Trade and other payables 607 248
Total Liabilities 607 248
Total Equity and Liabilities 12,008 12,130
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 2022 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 lapsed - - (1) - (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
Comprehensive income for the year:
- loss for the year - - - (2,221) (2,221) (48) (2,269)
- other comprehensive income - - (359) - (359) - (359)
Total comprehensive income for the year - - (359) (2,221) (2,580) (48) (2,628)
Issue of share capital net of expenses 1,141 824 - - 1,965 - 1,965
Share-based payments - - 182 - 182 - 182
Total contributions by and distributions to owners of the Company 1,141 824 182 - 2,147 - 2,147
Balance at 31 December 2023 8,070 25,804 1,336 (23,520) 11,690 (289) 11,401
Statement of consolidated cash flows
Year ended
31 December 2022
Year ended
31 December 2023
£'000 £'000
Cash flow from operating activities:
Net cash used in operating activities (531) (1,305)
Cash flow from investing activities:
Purchase of property, plant and equipment - (10)
Purchase of intangible assets (329) (842)
Tax received 158 403
Interest received 6 5
Net cash used in investing activities (165) (444)
Cash flow from financing activities:
Net funds received from issue of shares 303 895
Net cash generated from financing activities 303 895
Net decrease in cash and cash equivalents (393) (854)
Cash and cash equivalents at beginning of the period 507 1,361
Cash and cash equivalents at end of the period 114 507
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 2023 or the year
ended 31 December 2022 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 2023 and 31 December 2022 have been reported on by the
Independent Auditors. The Independent Auditors' Reports on the Annual Report
and Financial Statements for 2023, was unmodified and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006. 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 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 2022 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 2023 the Group had cash and cash
equivalents of £114k and no borrowings. However, the Group had signed Heads
of Terms agreements with BCM International Limited that became binding
agreements in January and February 2024 (the 'BCM Agreements'). The BCM
Agreements provided payments of $1.5M to the Group, received in full at the
date of this report, and provide $8m of exploration funds across two licences.
Alongside this, in August 2023, the Group had signed an equity funding
agreement with Lanstead Capital Investors L.P. (the 'Lanstead Agreement') that
provides monthly income until August 2025 based upon the prevailing monthly
share price.
Having considered the funds received from the BCM Agreements and the likely
funds to come from the Lanstead Agreement, together with the prospects for
asset disposals, the Group's ability to implement cash preservation measures,
as was done in 2023, and having considered the 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 the Lanstead Agreement and asset sales will match the
Board's expectations, and this may affect the Group's ability to carry out its
work programmes as expected. Should the Group and Company be unable to
continue trading as a going concern, adjustments would have to be made to
reduce the value of the assets to their recoverable amounts, to provide for
further liabilities which might arise and to classify non-current assets as
current. The financial statements have been prepared on the going concern
basis and do not include the adjustments that would result if the Group and
Company were unable to continue as a going concern.
2. Segment reporting
The Group's main operations are located in West Africa, Turkey and East
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 2023
Intangible assets - - 10,766 - 10,766
Property, plant and equipment - - 2 6 8
Cash and other assets 18 - 98 1,118 1,234
Liabilities (1) - (47) (559) (607)
Inter-segment (3,313) - (3,697) 7,010 -
Net assets/(liabilities) (3,296) - 7,122 7,575 11,401
Exploration UK support & other Group
Turkey East Africa West Africa Total
£'000 £'000 £'000 £'000 £'000
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
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
2023
Administration expenses (13) - (61) (1,047) (1,121)
Depreciation charge - - (1) (7) (8)
Other income/(losses) 6 (416) - (639) (1,049)
Exchange losses - - (216) (33) (249)
Inter-segment charges - - (274) 274 -
Tax credit - - - 158 158
Profit/(loss) for year (7) (416) (552) (1,294) (2,269)
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 - (1,449) - - (1,449)
impairment of associate
Exchange gains 1 - 492 46 539
Inter-segment charges - - (274) 274 -
Tax credit - - - 403 403
Profit/(loss) for year 11 (1,449) 113 (244) (1,569)
3. Financial assets
Group
2023 2022
£'000 £'000
Financial assets at fair value through profit and loss recoverable after more 395 -
than one year
Financial assets at fair value through profit and loss recoverable within one 593 -
year
Financial assets at fair value through other comprehensive income - 395
At 31 December 988 395
Financial assets at fair value through profit and loss reflect the amounts due
under the Lanstead Sharing Agreement, valued at the year-end share price.
Financial assets at fair value through other comprehensive income in the prior
year comprised an 8.03% investment in Thani Stratex Djibouti Limited, against
which full provision has been made during the current year.
4. Intangible assets
The Group's Intangible assets comprise entirely of exploration assets.
Group
2023 2022
Cost £'000 £'000
Cost at 1 January 10,559 9,376
Exchange movements (139) 325
Additions 346 858
At 31 December 10,766 10,559
The capitalised cost of the principal projects and the additions during the
year are as follows:
Capitalised cost Additions in year
2023 2022 2023 2022
£'000 £'000 £'000 £'000
West Africa
Senala 6,363 6,502 - -
Cameroon 4,403 4,057 346 858
Total Intangible assets 10,776 10,559 346 858 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 estimates 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 X, or contact:
Oriole Resources PLC Tel: +44 (0)23 8065 1649
Bob Smeeton / Tim Livesey / 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-listed gold exploration company, operating
in West Africa. It is focussed on early-stage exploration
in Cameroon, where the Company has reported a Resource of 375,000 oz Au at
2.30g/t in the JORC Inferred category at its 82.2%-owned Bibemi project and
has identified multi-kilometre gold and lithium anomalism within the
district-scale Central Licence Package project. BCM International is
currently earning up to a 50% interest in the Bibemi and Mbe licences in
return for a combined investment of US$1.5m in signature payments, up
to US$8m in exploration expenditure, as well as JORC resource-based success
payments.
At the Senala gold project in Senegal, AGEM Senegal Exploration Suarl
('AGEM'), a wholly-owned subsidiary of Managem Group, has recently completed
a six-year earn-in to acquire an estimated 59% beneficial interest in the
Senala Exploration Licence by spending an estimated US$5.8 million. A review
of expenditure and discussions on the formation of a joint-venture company are
currently underway. The Company also has several interests and royalties in
companies operating in and Turkey that could deliver future cash flow.
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