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

Oriole ResourcesAnnouncement

20/11/2023 07:15

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RNS Number : 9058T  Oriole Resources PLC  20 November 2023

Oriole Resources PLC

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

 

Heads of Terms on the Mbe Licence, Cameroon

 

Oriole Resources (AIM: ORR), the AIM-quoted exploration company focussed
on West Africa, is delighted to report that it has signed a non-binding
Heads of Terms ('HoT') with Ghana-based BCM International Limited ('BCM'), a
well-respected mining and civil contractor, for an earn-in by BCM ('Earn-In
Agreement') to fast-track exploration at the Company's 90%-owned Mbe gold
licence ('Mbe' or the 'Licence') in central Cameroon. Following the HoT, the
conditional Earn-in Agreement is expected to be executed before the end of the
year.

 

Highlights

 

·    Non-binding HoT signed with BCM to enter into the Earn-In Agreement
whereby BCM will earn up to a 50% interest in the Licence in return for the
following staged commitments:

o  Following execution of the HoT, BCM will, at its own cost, complete a
period of due diligence ('Due-Diligence Period') at Mbe, ending no later than
31 January 2024;

o  Following execution of the Earn-In Agreement and subject to a positive
outcome of that Due-Diligence Period, BCM will pay Oriole US$1m cash payment
('Signature Payment');

o  BCM will commit to US$4m in exploration expenditure, focused on defining
Resources at the Licence;

o  Further success-based payments from BCM to Oriole, the level of which is
subject to the number of resource ounces reported under JORC.

·    Subject to completion of the Earn-In Agreement, it is anticipated
that maiden drilling will commence at Mbe in Q1-2024;

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

·    Drilling will be provided by BCM, under a separate contract, at cost
plus 10% on an open book basis;

·    Oriole will continue to manage the technical programmes, under a
separate contract, and will provide its geological and administrative teams to
BCM at cost plus 10%;

·    Following signature of the HoT, Oriole has received a non-refundable
payment of US$50k (the 'Advanced Payment'), which shall be set off against the
Signature Payment on execution of the Earn-In Agreement;

·    The Earn-In Agreement is currently being drafted and is expected to
be executed before the end of 2023 subject to the satisfaction of certain
conditions precedent. Completion of the Earn-In Agreement will be subject to
certain conditions;

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

 

Oriole Resources CEO, Tim Livesey, said: "As with the Bibemi project, BCM
has committed to a significant investment at Mbe, and we look forward to
working with them as partners as we develop and expand the potential of this
highly prospective licence.

"Coming as it does, alongside the Bibemi Heads of Terms agreement, this deal
delivers strategic investment into early-stage exploration for Oriole and for
Cameroon.  The 'proof of concept' works carried out in 2021 and 2022 has
delivered and the discovery made by the Oriole team in 2022/23 at Mbe has
opened the area as a new gold frontier in Africa.  We hope that continued
exploration success will drive further interest in Cameroon as a new mining
jurisdiction.

"As a partner to Oriole, BCM brings a wealth of experience in mining in Africa
and we look to capitalise on this alliance across our projects. Mbe is just
one licence in the prospective Eastern CLP and so it's worth noting that we
have four other, neighbouring licences ripe for similar deals or indeed
'go-it-alone' exploration."

 

Further Details on the Transaction

 

The Company has signed a HoT with BCM regarding the intention for both parties
to enter into an Earn-In Agreement on the Company's 90%-owned Mbe gold licence
project in central Cameroon, where Oriole has recently identified high-grade
gold mineralisation (up to 134.10 grammes per tonne ('g/t') at surface) within
a 3 kilometre-long by 70-metre-wide structural corridor.

 

The terms outlined in the HoT would see BCM earn up to a 50% beneficial
interest in the Licence in return for meeting certain staged commitments as
presented in the following table.

 

 BCM Commitment                                                                   Conditions

 US$1m Signature Payment in cash                                                  ·    On execution of Earn-In Agreement.

                                                                                  ·    Subject to an initial Due Diligence Period, ending 31 January 2024
                                                                                  and BCM deciding to proceed beyond that Due Diligence Period.

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

 US$4m exploration funding                                                        ·    Expenditure to be allocated against a pre-agreed work programme,
                                                                                  focussed on identifying and building Resources within the Licence.

                                                                                  ·    Upon completion of each US$500k tranche of funding, Oriole shall
                                                                                  undertake to hold an additional 5% beneficial interest in the Project on trust
                                                                                  for BCM.

                                                                                  ·    The technical programme and all administration will be managed by
                                                                                  Oriole through a separate contract, the key commercial terms of which will be
                                                                                  included in the Earn-In Agreement and charged to the Project at cost plus 10%.

                                                                                  ·    Exploration and Resource drilling to be provided through a separate
                                                                                  contract with BCM and charged to the Project at cost plus 10% on an open book
                                                                                  basis.

 Success-based payments related to the definition of JORC-classified Resources,   ·    A maximum of 10 Resource payments are payable on the release of JORC
 with at least 50% being estimated within the Indicated and/or Measured           Inferred Resource milestones (set at 1-million-ounce increments) in relation
 categories.                                                                      to Mbe;

                                                                                  ·    BCM will pay Oriole the First Resource Payment of US$1m on the
                                                                                  release of a 1-million-ounce JORC-classified Resource in relation to Mbe;

                                                                                  ·    Additional resource payments of US$1m each will be due for each
                                                                                  additional million ounces JORC-classified Resources reported at Mbe up to 5
                                                                                  million ounces, and will increase in value for the remaining five milestones
                                                                                  to 10 million ounces;

                                                                                  ·    A maximum Cumulative Resource Payment of US$20m will be payable by
                                                                                  BCM to Oriole on delivery of a 10-million-ounce JORC-classified Resource.

 

 

The Earn-In Agreement is currently being drafted and is expected to be
executed before the end of the year, with payment of the Signature Payment
being subject to BCM electing to proceed beyond the initial Due-Diligence
Period. Beyond these commitments, any further expenditure at Mbe will be on a
contribute or dilute basis. In the event that Oriole's percentage holding in
the Licence falls below 5%, then its interest will convert to a 3% NSR royalty
on future production at Mbe.

 

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

 

Following signing, completion of the Earn-In Agreement will be conditional on
the satisfaction of certain conditions and the Company will provide a further
announcement upon execution of the Earn-In Agreement in due course.

 

The transfer of the beneficial interest in the Project to BCM will be
conditional, amongst other things, on obtaining the requisite governmental or
other consents.

 

 

Further Details on BCM

 

BCM began as "Bayswater Contracting", a family firm in Western Australia in
the early 1950s, primarily in the civil works and mining construction
business. Under the same family ownership, BCM expanded into Ghana in 1990 and
thereafter further into Mali, Tanzania, Guinea and Niger. By the year 2000,
BCM had established itself as one of the leading mining and civil contractors
in Sub-Saharan Africa, an area containing significant mineral wealth.

BCM is a long-established Contract Mining and Civil Earthworks Contractor in
West Africa. Previous and existing clients of BCM include: AngloGold Ashanti
Limited; African Minerals Limited (Tonkolili Iron Ore); Abosso Goldfields;
Ausenco; Bogosu Ghana Limited; Cluff Mining; Endeavour Mining, Ghana;
Goldfields Ghana Limited; Lycopodium; Minproc; Randgold Resources; Afrika
Marashiki Gold Limited; Semafo Holdings; Sabodala Mining Company Societe Des
Mines Du Liptako, S A; Newmont Ghana Gold Limited and Oxus Gold Resources
Glencore/Kazzinc.

Most recently, in January 2023, BCM signed a contract mining agreement with
the current owner of the Tonkolili iron ore mine in Sierra Leone, Leone Rock
Metal Group, which has Proven reserves of 15.8 billion tons of iron ore. The
Tonkolili mine is Africa's second-largest iron ore mine and one of the largest
magnetite deposits globally with an estimated operational period of more than
60 years.

 

The company employs nearly 5,000 people at its sites with its diversified
business, ranging from mining contracting, earthworks, civil construction,
exploration drilling, drill and blasting and in-mine technical and management
support.

 

 

Further Details on Mbe

 

The 312km(2) Mbe licence is located within a wider, district-scale package of
licences known as the Central Licence Package ('CLP' of the 'Package'). The
CLP covers 4,091km(2) of geologically-prospective ground in the centre
of Cameroon, and has significant potential for orogenic gold mineralisation
and other minerals. The Package comprises nine contiguous licences (five
defined as Eastern CLP, three defined as Western CLP and the lithium-focussed
Gamboukou licence) and the Company has a 90% interest in all nine licences,
which it holds through local subsidiary companies. The Eastern CLP (Tenekou,
Niambaram, Pokor, Ndom, and Mbe) licences were granted in February 2021 and
have an initial exploration term of three years, plus three renewable
extensions of two years each.

 

Within the Eastern CLP, work during 2023 has been focussed in particular on
the Mbe licence, where rock-chip sampling over a 3km-long (and at least
70m-wide) north-northeast trending structural corridor (comprising
sulphide-rich and locally brecciated quartz veins within strongly altered
granitic host rocks) delivered high-grade gold (announcements dated 30
January 2023 and 27 February 2023). Of the 76 samples analysed, 17 samples
yielded greater than 1 g/t Au with best results including 134.10, 131.80,
64.30, 40.80, 19.44 and 16.20 g/t Au. Subsequent artisanal workings exposed
narrow (3-4m wide) trench-like profiles over a single quartz vein within the
broader 70m-wide package of veins. This enabled the collection of 19
channel-chip samples (22 including QAQC) on six parallel lines, which were
completed perpendicular to the dominant north-east shear trend and covered a
200m strike length (announcement dated 21 June 2023). Seventeen of the samples
graded more than 1 g/t Au, with mineralised intervals returned on all lines
and best intervals including 2.20m grading 8.47 g/t Au (MBTR001), 5.00m
grading 2.03 g/t Au (MBTR004) and 2.10m grading 3.69 g/t Au (MBTR005). These
results should be considered partial trenches as they do not test the full
width of the mineralised zone, only the portion exposed in the artisanal pits.

 

The Company plans to complete maiden drilling at Mbe in 2024 and further
details on this programme will be announced in due course.

 

For further information on Mbe, including maps and a JORC Table 1, please
see the following page of the Company's
website: https://orioleresources.com/projects/central-licence-package/
(https://orioleresources.com/projects/central-licence-package/) .

 

 

Competent Persons Statement

The information in this release that relates to Exploration Results has been
compiled by Claire Bay (Executive Director, Exploration and Business
Development). Claire Bay (MGeol, CGeol) is a Competent Person as defined in
the JORC code and takes responsibility for the release of this information.
Claire has reviewed the information in this announcement and confirms that she
is not aware of any new information or data that materially affects the
information reproduced here.

 

 

** ENDS **

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part
of UK law by virtue of the European Union (Withdrawal) Act 2018. The
information is disclosed in accordance with the Company's obligations under
Article 17 of the UK MAR. Upon the publication of this announcement, this
inside information is now considered to be in the public domain.

 

For further information please visit www.orioleresources.com
(http://www.orioleresources.com/) , @OrioleResources on Twitter, or
contact:

 

 Oriole Resources Plc                    Tel: +44 (0)23 8065 1649
 Tim Livesey / Bob Smeeton / Claire Bay

 BlytheRay (IR/PR Contact)               Tel: +44 (0)20 7138 3204
 Tim Blythe / Megan Ray

 Grant Thornton UK LLP                   Tel: +44 (0)20 7383 5100
 Samantha Harrison / Ciara Donnelly
 SP Angel Corporate Finance LLP          Tel: +44 (0)20 3470 0470

 Ewan Leggat / Harry Davies-Ball

 

Notes to Editors:

 

Oriole Resources PLC is an AIM-quoted gold exploration company, operating
in West Africa. It is focussed on early-stage exploration
in Cameroon, where the Company has a maiden Resource of 305,000 oz Au at
2.19g/t in the JORC Inferred category at the Bibemi project and has identified
multi-kilometre gold and lithium anomalism within the district-scale Central
Licence Package project. At the more advanced Senala gold project in Senegal,
Oriole was advised by IAMGOLD on 26 April 2023 that AGEM Senegal
Exploration Suarl ('AGEM') was now a wholly-owned subsidiary of Managem
Group. As previously announced, AGEM has earned an initial 51% beneficial
interest in the Senala Exploration Licence by spending US$4 million and has
the option to spend up to a further US$4 million by 28 February 2024 to
earn an additional 19% interest in the licence. The Company also has several
interests and royalties in companies operating in East
Africa and Turkey that could deliver future cash flow.

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