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Oriole Resources PLC (ORR)

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Wednesday 24 March, 2021

Oriole Resources PLC

Final Results and Notice of AGM

RNS Number : 2541T
Oriole Resources PLC
24 March 2021
 

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, the AIM-quoted exploration company focused on West Africa, announces its final results for the year ended 31 December 2020.

Copies of the Company's Annual Report will be posted to shareholders on or before 30 April 2021. The Company's Annual General Meeting will be held at 11.00am on 23 June 2021 at its offices located at Wessex House, Upper Market Street, Eastleigh, Hampshire, SO50 9FD.

 

Operational Highlights:

· Maiden drilling programme underway at the Bibemi licence in Cameroon for a planned 3,080 meters ('m') of diamond drilling in 28 holes;

· Continued exploration by IAMGOLD Corporation ('IAMGOLD') through the completion of a 6,901 m aircore ('AC') programme, drilled at the Faré prospect in the north of the licence, as part of its continued earn-in at the Senala licence. The work has confirmed and enhanced the scale of the gold-in-soil anomalism at Faré;

· Award of an extensive 3,592 km2 licence package in central Cameroon.

 

Financial Overview:

· Operating loss of £0.34 million reported for the year to 31 December 2020; a significant reduction compared to a loss of £1.41 million in the prior year;

· Loss for the year after tax reduced to £0.32 million, a reduction of 81% when compared to the prior year;

· Fund raises totalling £2.37 million which has meant the Group has successfully fully-funded the next stage of work in Cameroon;

· UK Administration expenses reduced by 17% to £0.87 million.

 

Post Year End:

· £678k of cash received from warrant exercises subsequent to the year end.

 

Tim Livesey, CEO of Oriole, commented:

"Whilst 2020 was a difficult and unprecedented year at a global level, at Oriole we succeeded in advancing the Company's pre-stated development goals of signing of a drill contract and securing the necessary funds to allow us to finish the year poised for the commencement of our maiden drilling programme at Bibemi in Cameroon. With initial results anticipated in Q1, and continuing into Q2, we look forward to building our knowledge of the extensive gold mineralisation on the licence.

"We also secured, alongside our partner, a district-scale package of eight new licences in central Cameroon covering 3,592 km2. We believe the area to be highly prospective for gold, both from historic results and from our initial remote sensing studies on the area. A reconnaissance visit has already been completed ahead of an upcoming stream sediment sampling programme, which we anticipate will commence in Q2.

"In Senegal, our earn-in partner, IAMGOLD, completed its Year 3 earn-in behind their cumulative expenditure commitment of US$2.5 million. The shortfall was mainly due to not completing the planned Reverse Circulation ('RC') and Diamond Drilling ('DD') at the northernmost Faré prospect. We have agreed to roll this shortfall forward into the year 4 work programme which will commence shortly. Meanwhile, the results of the 2020 Air Core ('AC') drilling programme were recently received, which confirmed and enhanced the known gold-in-soil mineralisation at Faré.  

"The next stage of exploration at Faré will be an RC and DD programme, which is planned for completion by the end of Q2, and we also look forward to the planned RC and DD programme at Madina Bafé later in the year.

"We have continued to look for ways of realising value from our legacy assets in Turkey and East Africa. Whilst the cash raised from these assets has been moderate to date, we have seen welcome signs of progress across the board which include converting royalty streams into cash lump-sums payable upon the commencement of construction, value-adding drilling in Djibouti and the newly-announced deal with Red Sea Resources in Egypt.

"Finally, I would like to thank our employees for their support over what has been an unprecedented year. Without exception, the team made personal sacrifices to secure the future of Oriole and their hard work and continued support and commitment has allowed us to emerge from 2020 well positioned for the exploration work that is already well-progressed in 2021."

 

Chairman's Statement

2020 will be remembered as the year of the Covid-19 pandemic, with all businesses impacted to some degree by the unprecedented events arising from this. I am pleased to report that the Company proved largely resilient to the impacts of the pandemic, and whilst certain exploration activities did get delayed, the Company advanced its strategic objectives in Cameroon, saw IAMGOLD continue its investment in Senegal and moved forward on realising value from some of its legacy assets.

Our initial reaction to the near-global lockdown of March 2020 was to protect the business and move into a cash conservation mode as markets across the world faced great uncertainty. This strategy is reflected in the financial information presented herein, with further reductions in costs adding to the substantial savings that had already been made prior to the pandemic. Two small fund raises early in the year protected the business and enabled us to start planning for our maiden drilling programme in Cameroon with as much certainty as possible considering the turbulent times.

For a junior explorer, active exploration and results drive shareholder value and so we feel we are extremely well placed as we start 2021 with active drilling campaigns at our core projects in Cameroon and Senegal as well as at our investment projects in Djibouti and Turkey, and very shortly in Egypt. Now with a robust gold price, a significantly improved share price and a strong cash position, we will look back on 2020 as a year of significant progress in the development of the Company, providing the foundation blocks to support our growth.

 

Operations

Senala, Senegal

Despite Covid-19, work on our 472.5km2 Senala licence in Senegal continued, largely due to the availability of drill-rigs in-country. From late Q2 2020, IAMGOLD was able to commence its planned Year 3 programme and completed a total of 6,901 m AC drilling during the period, covering the majority of the 6.4km strike of anomalous mineralisation.  The AC results (announcement dated 11 March 2021) re-confirmed the potential of Faré as a standalone, surface mineable target, endorsing and enhancing the results yielded from the Company's previous soil sampling campaigns.

Despite the underspend on the Year 3 commitment of US$172k, IAMGOLD remains enthusiastic about the earn-in and is planning to push ahead with Year 4, which will comprise follow up RC and DD programmes at Faré as well as more drilling at the southernmost Madina Bafé target (announcement dated 23 March 2021).  The Year 4 commitment will bring IAMGOLD's total investment in the project to US$4 million by 28 February 2022, which will require an additional c.US$1.7 million of expenditure over the next 11 months.

The proximity of Senala to IAMGOLD's mine-development project at Boto, and its prime location within the highly gold-endowed Kédougou-Kéniéba inlier, represents a significant driver of value for the Group, as do the results from other exploration companies operating in this area. We look forward to a very active Year 4 and sharing the results of that work.  

Bibemi, Wapouzé and new licences, Cameroon

As a precautionary reaction to Covid-19, Cameroon closed its borders in March 2020 and so our in-country work during the first half of 2020 was limited to the Q1 mapping campaign at Bibemi (announcement dated 11 May 2020). Following the seasonal rains (late June to early October) we finalised plans for our maiden drilling campaign at Bibemi in northern Cameroon, securing a minimum 3,000 m drilling contract with Capital Ltd. The necessary equipment for that programme was mobilised towards the end of the year and, despite some delays in response to the Covid 19-related global shipping crisis, drilling commenced in Q1 2021.

The total planned programme now stands at 28 holes for 3,080 m and will focus on testing the depth extension of surface gold mineralisation identified at four main prospects - Bakassi Zone 1, Bakassi Zone 2, Lawa West and Lawa East - that occur within an 8.3-kilometre-long system. Based on the surface exploration to date, we believe we have developed a strong initial geological model and this drilling will test and refine that model. First results are anticipated by the end of Q1 2021.

Exploration at Wapouzé is less advanced but two phases of soil sampling have previously identified c.13km strike length of gold anomalism within the eastern Bataol Zone. A limited trenching programme was completed early in 2021.

Under the terms of the earn-in agreement with our well-established local partner, Bureau d'Etudes et d'Investigations Géologico-minières, Géotechniques et Géophysiques SARL ('BEIG3'), our investment is progressing well, and will accelerate as the drilling campaign moves ahead. We have already passed the US$1.56 million earn-in target to secure 51% ownership of the holding company for Bibemi and Wapouzé (Reservoir Minerals Cameroon SARL), and are currently working through the legal formalities to complete that process. With the maiden drilling programme currently underway, the Company is on track to exceed its 90% earn-in target, through a further US$1.56 million of expenditure.

Alongside Bibemi and Wapouzé, we were delighted to receive confirmation of eight licence awards in central Cameroon (announcement dated 3 February 2021). Five of these licences are held directly by our 90%-owned subsidiary, Oriole Cameroon SARL, with the other three held by Reservoir Minerals Cameroon SARL, under the same earn-in agreement that controls ownership of Bibemi and Wapouzé. A remote sensing study has already been completed, identifying an initial 12 priority gold targets, and the team has undertaken a reconnaissance visit to complete initial ground-truthing of those targets and to inform the local authorities of the Company's upcoming work programmes (announcement dated 18 February 2021). The initial phase of exploration work will include a package-wide regional stream sediment sampling programme, the orientation study for which is currently underway, that we anticipate commencing in Q2. 

We continue to see great potential in Cameroon as a new frontier for gold exploration, and note increased interest from the wider exploration community, with a number of new licences applied for by our peers. We remain confident that our first mover position has enabled us to secure what we consider to be the most prospective ground and welcome the increased interest. The more active companies there are in a country, the easier and cheaper it becomes to secure drill rigs, specialist equipment and to provide the appropriate training for local staff, increasing the speed and economy of operations.

Investments and Royalty positions

The Group has a range of investment and potential royalty positions arising from exploration activities in prior years. We take an active interest in managing these positions, with the ultimate goal of maximising shareholder value. During the year, the Group realised its 12.27% holding in Tembo for net proceeds of £172k (announcement dated 25 February 2020), and received US$80k from the initial proceeds on the sale of two royalty positions. The remaining positions provide a potential source of funding for the Group and are subject to an ongoing asset realisation programme, whilst recognising that a number of these projects are progressing at a good pace, providing the opportunity to enhance shareholder value. The most significant remaining positions within the Group are set out below.

Thani Stratex Resources ('TSR')

TSR underwent a restructuring at the end of 2019 with the spin-out of its 50%-owned joint venture, Thani Stratex Djibouti. As such, TSR became exclusively focused on its (then 100%-owned) Hodine licence in Egypt that hosts the Anbat and Hutite projects. At Hutite, former operator Thani Ashanti drilled over 30,000 m of RC and diamond drilling between December 2010 and March 2013. On the basis of this work, South Africa-based Quantitative Group estimated an Inferred Resource (non-JORC) of 11,410,000 tonnes grading 1.41 grammes per tonne ('g/t') gold ('Au') for 520,000 in-situ ounces using 0.40 g/t Au cut-off . At Anbat, TSR has previously announced a maiden JORC 2012-compliant Mineral Resource Estimate of 209,000 oz at 1.11 g/t Au within porphyry sills (announcements dated 6 and 13 December 2017).

TSR was unable to fund significant work at either project in the last few years, but the recently signed agreement with Red Sea Resources Limited ('RSR'; announcement dated 16 March 2021) provides an opportunity for this project to move forward. Under the terms of the agreement, RSR has paid all outstanding liabilities on the licence and will make staged payments of US$2.2 million to earn a total 85% interest in the project, with the parties contributing or diluting thereafter. If, at any time, TSR's shareholding in the licence holding company (currently 93%) falls below 10%, its interest shall be converted to a 1.5% net smelter return ('NSR') royalty on future gold production. Based on our 24.92% shareholding in TSR, this would equate to a 0.37% NSR royalty to Oriole, something that we would not have been entitled to under the previous joint venture terms with TSR.  

We await details of the work programme from RSR but anticipate that drilling will commence during 2021. Extension of the already identified resources will provide an impetus to mine building and we look forward to news flow in that regard. In order to monitor developments, Tim Livesey has accepted a seat on the Board of the joint-venture vehicle.

Thani Stratex Djibouti ('TSD')

TSD became a standalone vehicle in late 2019 and is now funded and managed independently from TSR. The company is focused on the exploration of epithermal gold projects in Djibouti, namely Pandora, Assaleyta and Hesdaba. Active drilling campaigns continued throughout 2020 and into 2021, and consequently our initial holding has been diluted down to 10.61% (announcement dated 23 March 2021). However, with African Minerals Exploration & Development Fund III ('AMED Fund III', TSD's largest shareholder) committed to funding and managing a substantial three-year exploration programme in Djibouti (announcement dated 19 November 2019) we believe the value being added outweighs the impact of dilution. AMED Fund III is now managing and funding substantial exploration campaigns at the three main projects, Pandora, Assaleyta and Hesdaba.

At Pandora, a Phase 3 drilling programme was completed for 1,242 m. Results from the 13-hole programme supported those yielded from the previous drilling phases, with the best intersections yielded at the north-western end of main Pandora prospect and at the south-eastern end of the Pyrrha prospect. Best results included 16.86 m grading 1.42 g/t Au from 13.00 m and 6.80 m grading 2.19 g/t Au from 23.58 m. Meanwhile, at Hesdaba, a Phase 1 drilling programme comprising 2,242 m of diamond drilling (17 holes) and 3,413 m of RC drilling (33 holes) was also completed to test the epithermal system at depth across three primary targets: Maranzana, Caravan and Red Horns. Initial results have confirmed significant mineralisation at all three prospects, with best results achieved from Red Horns, including 15.00 m grading 4.08 g/t Au (announcements dated 22 December 2020 and 23 March 2021). The remaining results from the programme are anticipated in Q2-2021.

Work at Assaleyta mostly comprised camp and road construction as well as drill access works for a planned Phase 2 diamond drilling programme. In Q1-2021, that programme was completed for 687.80m diamond drilling in three holes and 2,508m RC drilling in 22 holes. Results for 1,558 diamond core and RC chip samples (inclusive of QAQC) are anticipated in Q2.

Tim Livesey has been appointed to the TSD board (announcement dated 9 March 2020) and the encouraging results to date provide the Board with confidence in the carrying value of this asset (£784k at the 2020 year-end).

Muratdere

Our interest in the Muratdere gold project in Turkey converted to a 1.2% NSR royalty during 2019 (announcement dated 21 November 2019). Our joint-venture partner, Lodos Maden Yatırım Sanayii ve Ticaret A.Ş. ('Lodos'), has submitted its Environmental Impact Assessment ('EIA') report and we are awaiting the successful conclusion of this key phase. Our royalty attracted significant interest from a number of Groups during the year. However. with a 27% rise in the copper price during 2020, and anticipated progress towards authorisation of the mine building phase, we are pleased to have retained this asset within our portfolio.

Karaağaç

At the Company's former Karaaǧaç gold project in Turkey, the current owner, Anadolu Export Maden Sanayi ve Ticaret Limited Şirketi ('Anadolu'), confirmed an Indicated Resource significantly in excess of the 50,000 ounces of gold necessary to trigger the US$500k success-based payment due to Oriole upon meeting that milestone. US$75k of this was received in 2019, but the balance remains outstanding and we have commenced legal proceedings in order to secure recovery of this debt.

Despite this non-payment, Anadolu was contractually entitled to exercise its right of first refusal on the remaining 1.5% NSR royalty position when we received an offer for this from a third party. Consequently, we received US$50k from Anadolu (announcement dated 17 August 2020) with a further US$250k due when the project moves towards mine building. We monitor progress on this project carefully and retain the right to re-instate the royalty position should Anadolu default on this second payment. 

Hasançelebi and Doğala

At the Hasançelebi and Doğala gold projects in Turkey, the Company signed an exploration agreement with Turkish private company Bati Toroslar Sti ('Toroslar') in 2019. In addition to exploration expenditure commitments of US$1.38 million, the agreement provides for the payment of a US$500k success-based fee upon successful definition of a minimum 100,000 oz Au JORC-compliant resource and completion of the EIA. Drilling has been on-going through the latter part of 2020 and into 2021 and our Turkish team are engaged as consultants on the programme. Completion of the drilling phase will allow resource calculation to proceed and we look forward to news on this during 2021.

In addition, in 2020 and following a third-party offer, Toroslar exercised its right to acquire our 1.5% royalty on Hasançelebi and Doğala for an initial cash payment of US$30k, with a further US$220k due once the project moves to mine-building (announcement dated 30 July 2020). We would expect this, and the US$500k success-based fee, to potentially become payable in 2022.  

Financial Review

We are pleased to be reporting a considerably reduced loss for the year of £0.32 million (2019: £1.66 million), aided by a £317k foreign exchange gain on our Senala asset, but also by significant cost-saving measures that have reduced administrative overheads by 35%, as well as the continued successful growth of the Turkish consultancy business. Excluding the foreign exchange gain, an operating loss of just £645k for an active AIM-quoted exploration company is a real achievement and reflects the Board's determination to focus available funds on its exploration programmes. Whilst Covid-19 restrictions limited activity in the early part of the year, the focus on being drill-ready for when restrictions finally lifted meant that, at the turn of the year, we were on the ground in Cameroon preparing for the arrival of a drill rig.

With a significant fund raise completed in October 2020, along with funds from asset realisations and Research and Development tax credits of £165k, the Group closed the year with £1.75 million of cash. As a result of a rising share price, a further £678k of cash has been received from warrant exercises in early 2021. The Group's plans for the current exploration season in Cameroon are fully-funded, and with potentially another £1.47 million to come from warrant exercises, the Company's financial position is looking strong to support significant work planned throughout 2021.

The Board's commitment to maximising the cash available for exploration work was demonstrated by the agreement to convert four-months of salary into share options (announcement dated 20 August 2020) and members of the Board also participated in the Company's fundraise at the end of the year (announcement dated 7 October 2020). In addition, work continues to realise value from our legacy assets, with progress made with the sales of two of the Turkish royalty assets and the disposal of the 12.7% stake in Tembo.

Covid-19

Covid-19 was a significant global challenge in 2020 and remains so going into 2021. Whilst the UK is showing encouraging signs of recovery, with the easing of restrictions enabled by the mass vaccination programme, we are an international business operating largely in Africa where vaccine programmes will, sadly, inevitably lag behind their Western counterparts. Whilst Cameroon and Senegal are currently open for business, and our drill-camp in northern Cameroon is isolated from any significant population, there is undoubtedly uncertainty around how the pandemic may impact operations in the future. Whilst we do not anticipate any operational issues currently, we continue to monitor the situation closely, and put the health and safety of our employees and contractors first. 

Annual General Meeting ("AGM") Update 

The Company's AGM is scheduled for  23 June 2021 at Wessex House, Upper Market Street, Eastleigh, Hampshire, SO50 9FD. Whilst we currently plan that this will be an open meeting, the Company encourages all shareholders to vote via proxy form in advance of the meeting date, although attendance will be permitted, subject to any delay on reducing lockdown restrictions in the United Kingdom. The Company shall inform shareholders via regulatory announcement if the meeting needs to revert to being a closed meeting.

Outlook

The Company's strategy is to develop a portfolio of exploration projects for gold and base metals and to identify potential partners to take them into the advanced exploration and mine development stages. Our Senala licence in Senegal and our Bibemi, Wapouzé and Central Licence package in Cameroon, provide us with exposure to various stages of the exploration cycle, and we also have a number of valuable legacy positions that can help us to generate cash for our exploration activities.

In 2021, we expect news across five drill programmes, as well as the generation of targets across our 3,592 km2 Central Cameroon licence package. With cash in the bank, and further cash potentially coming in from warrant exercises and the legacy asset realisation programme, the near-term exploration programme is fully-funded. We continue to look for further opportunities that we believe would add shareholder value.

Though 2020 was a very challenging year for companies everywhere, we have come through it stronger, thanks to the exceptional support from our employees. On behalf of Oriole's Board of Directors, I would like to express our appreciation and thanks to all of our employees for their efforts, sacrifices and hard work during the past year.

 

 

 

John McGloin

Non-Executive Chairman

23 March 2021

 

 

 

 

 

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 metals 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. We seek to acquire exposure to highly prospective districts, primarily in West Africa, and have 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

The Board of Directors, appointed in 2018, provide extensive experience in the exploration of mineral projects and the operation of public companies. The Board is ably supported by a management team that, for many years, has delivered successful exploration projects across Turkey and Africa.

Business environment

The price of gold increased by 24% during the year, from an opening position of US$1,523 per ounce, to US$1,894 per ounce at 31 December 2020. With continued economic uncertainty, we believe gold's reputation as a safe haven will continue to give upward pressure on its price.

In addition, the low global levels of exploration work, and consequently low levels of new resource defintion, over the last decade has meant resouce pipelines have not been replenished. The need to replenish resources, and the strength of the gold price, is driving renewed investment  into early-stage exploration.

Business performance

2020 Operations

The Group's main operations are split between active exploration projects and the management of our investment and royalty positions.

Impact of Covid-19

The global pandemic of 2020 had an impact on the Group's operations, mainly in respect of its exploration operations in Cameroon. For much of Spring and Summer 2020, Cameroon's borders were shut and we could not get access to our licence areas. As these restrictions were eased in Autumn, we were able to complete the mapping work we had been progressing in early 2020 in advance of a drilling programme. We are now fully operational in Cameroon.

The other main impact on the business was the related impact that the Covid-19 crisis had on the global shipping industry, that suffered from a crisis of logistics with ships unable to dock, containers in the wrong places and congestion at major dock facilites. These shipping challenges ultimately delayed the arrival of the drill rig from an initially expected Q4 2020, into Q1 2021. This short term inconveneince is now resolved.

In March 2020, as an immediate response to the developing pandemic, the Board and management team took substantial pay cuts in order to preserve funds in uncertain times. Our employees,  professional advisors and other suppliers supported us in these cost savings measures, and the Board would like to thank all those that gave the Company their support during those uncertain and unprecedented times.

We continue to monitor the impact of Covid-19 but believe the impact on our operations in 2021 will not be significant.

Active Exploration projects:

The primary focus for the Group's own exploration activities is our position in Cameroon. In 2018 the Group signed an earn in agreement with BEIG3 to gain an interest in the Bibemi and Wapouzé licences in northern Cameroon. Work on the licences in 2019 and early 2020 provided encouraging results at both licences and further exploration programmes are now underway, including a maiden 3,080 m drilling programme at Bibemi. Trenching at Wapouzé has been completed with the intention of defining drill targets once results of that work are available.

We received confirmation of licence renewals for both Bibemi and Wapouzé during the year, giving us the confidence to proceed with our exploration plans. In 2018, we signed an agreement with the owner of the licences, BEIG3, that enabled the Group to earn into a 51% equity position on completion of US$1.56 million of expenditure, and up to 90% equity position following the completion of a further US$1.56 million of exenditure. We have reached the first milestone and are in the process of formalising the ownership position.

In addition, in 2019 the Group applied for a district-scale package of licences in central-Cameroon, covering 3,592km2 of highly prospective ground that had been identified by the Group as part of a prospectivity review in the summer of that year, based on historic data and our knowledge of the key structural features that define Cameroon's geology. The licence grants were received in February 2021 and we are now commencing our initial exploration activities.

In 2018, the Group entered an agreement with Canadian-listed gold miner IAMGOLD, for it to earn-in to the exploration licence at Dalafin in Senegal. This 472km2 of highly prospective ground, in the middle of the Kédougou-Kéniéba inlier, is surrounded by historic and contemporary gold discoveries. Early in 2020, the Group managed to re-licence the Dalafin land package which, under its new name Senala, now has security of tenure for up to a further 10 years. After meeting its Year 1 and Year 2 commitments, IAMGOLD, as a result of delays due to Covid-19, failed to meet its Year 3 commitment with a shortfall on its expenditure commitment and planned work programme. Nevertheless, an extensive AC programme was completed that confirmed significant anomalism at the Faré prospect, and IAMGOLD has confirmed its intention to proceed with Year 4 of the earn-in. The scope of the Year 4 work programmes has been agreed and the Company is comfortable that IAMGOLD will catch up the underspend and meet its 51% option expenditure requirement.

Investment and royalty positions:

The Company has a long history of gold and base metal exploration success and 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. The management team actively manage these assets, including taking up Board positions where possible in order to assist with value maximisation.

During the year the Company disposed of its interest in Tembo Corporation Inc, for £172k (announcement dated 25 February 2020) and concluded two agreements in respect of royalty positions in Turkey. The two Turkish royalties were sold in similar deals, with a total of $80k cash already received and $470k to become payable as the underlying projects move into their construction phases.

At the Company's former Karaaǧaç gold project in Turkey, we continue to pursue payment of $425k owed to us by the operator, Anadolu Export. We have now exhausted attempts to negotiate settlement and are moving towards a court date. We remain confident in the strength of our case.

We are also awaiting news of a US$1 million debt owed by a former partner in Turkey, who defaulted on tax payments they should have made. Progress on this is held up by a preceeding case involving this bad debtor but we anticipate this moving forward during 2021.

At the Muratdere Madencilik copper-gold project in northern Turkey, where we hold a 1.2% post-Turkish tax royalty position our joint-venture partner, Lodos, has continued to work towards obtaining approval for its EIA on a 16 million tonne optimised copper mine proposal.

During the prior year, TSR completed a re-organisation, with its TSD subsidiary hived out to become a standalone company. TSD, which operates the Pandora, Assaleyta and Hesdaba licences in Djibouti, is currently undergoing an active drilling campaign, funded by AMED, the majority shareholder, and we have received encouraging results from this investment throughout the year. Oriole currently has a 10.61% interest in TSD and has a 24.92% interest in TSR for its projects in Egypt.

Financial Review:

The Group's loss after tax for the year was £320k (2019: loss of £1,660k).

Whilst this significant reduction in the loss for the year was partly driven by an unrealised foreign exchange gain of £317k, compared to a £445k exchange loss in the prior year, the rest of the decrease, some £578k, was driven by further reductions in costs and increases in the profitability of the consultancy business built up by our Turkish team.

Administration expenses of £1,018k (2019: £1,556k) were 35% lower than the previous year, with a mixture of cost saving measures implemented as a response to the business uncertainty arising from the Covid-19 pandemic. Salaries and professional fees were reduced and accrued salaries from 2019 were, as planned, relinquished by the Directors in exchange for a share option scheme, effectively amounting to a direct investment of four months of salary by each member of the Board.

In Turkey, the consultancy business established by the Turkish team in 2019 managed to prosper despite local lockdowns being in place for much of the year. Net profits of £162k were generated and, importantly, the cash flow was used to settle outstanding historic employment liabilities for that team.

The continued reduction in net cost was bolstered by £317k of foreign exchange gains arising on the Senala asset in Senegal, which is denominated in Euros. In addition, further research and development tax credits, totalling £165k, were received during the year. Consequently the Group loss after tax  was reduced by 81% to £320k.

The Group ended the year with a cash balance of £1,751k, an increase in the year of £1,588k. With the exploration programme in Cameroon suspended early in 2020 due to a Covid-19 lockdown, the Group focused on getting ready for the drill programme that is currently underway at Bibemi. Two small fund raises early in the year enabled the Group to push ahead with drill contract negotiations, which were concluded in September, and the raise in October 2020 brought in £1,869k of additional funding for the drill programme. The Group also continued with its asset realisation programme, with the sale of two Turkish royalties bringing in US$80k cash and a further US$470k to follow as the projects progress. The disposal of our holding in Tembo delivered further proceeds of £172k.

 

 

Tim Livesey

Chief Executive Officer

23 March 2021

 

 

Financial Statements

 

Statement of consolidated comprehensive income

 

 

 

 

 

Year ended 31 December 2019

£'000

 

 

 

 

 

Year ended 31

December 2020

£'000

 

 

 

 

 

Continuing operations

 

 

 

Administration expenses

 

(1,018)

(1,556)

 

Other income

 

682

150

 

Operating loss

 

 

(336)

(1,406)

 

Finance income

 

 

-

5

 

Share of losses in equity-accounted investments

 

(69)

(126)

 

Loss on change of ownership interest

 

(63)

(212)

 

Loss before income tax

 

 

(468)

(1,739)

 

Income tax credit

 

148

79

 

Loss for the year

 

 

(320)

(1,660)

 

Other comprehensive income for the year

 

 

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

Exchange differences on translating foreign operations

 

 

(50)

102

 

Items that may not be subsequently reclassified to profit or loss

 

 

 

Change in fair values of other financial assets

-

(240)

 

Other comprehensive income for the year, net of tax

 

 

(50)

(138)

 

Total comprehensive loss for the year

(370)

(1,798)

 

 

 

 

 

Loss for the year attributable to:

 

 

 

 

 

Owners of the Parent Company

 

 

(278)

(1,554)

 

Non-controlling interests

 

 

(42)

(106)

 

Loss for the year

 

 

(320)

(1,660)

 

 

 

Total comprehensive loss for the year attributable to:

 

 

 

Owners of the Parent Company

(328)

(1,692)

 

Non-controlling interests

 

 

(42)

(106)

 

Total comprehensive loss for the year

 

 

(370)

(1,798)

 

 

 

 

 

 

 

 

Earnings per share from losses attributable to the equity holders of the Company (expressed in pence per share).

 

 

 

 

 

 

  - basic and diluted, continuing operations

 

 

(0.03)

(0.22)

 

        

 

 

 

 

 

Statement of consolidated financial position

 

 

 

As at 31 December 2019

 

 

As at 31

December 2020

 

 

 

 

£'000

£'000

ASSETS

 

 

 

Non-Current Assets

 

 

 

Property, plant and equipment

 

61

21

Intangible assets (note 5)

 

7,771

7,244

Investments in equity-accounted associates (note 3)

 

1,449

2,250

Financial assets held at fair value through other comprehensive income (note 4)

 

395

165

Trade and other receivables

 

389

-

Deferred tax asset

 

14

38

 

 

10,079

9,718

Current Assets

 

 

 

Trade and other receivables

 

139

121

Cash and cash equivalents

 

1,751

163

 

 

1,890

284

Total Assets

 

11,969

10,002

EQUITY

 

 

 

Equity attributable to owners of the Company

 

 

 

Share capital

 

5,667

4,908

Share premium

 

22,862

21,253

Other reserves

 

1,591

1,185

Retained earnings

 

(18,187)

(17,578)

Total equity attributable to owners of the Company

 

11,933

9,768

Non-controlling interest

 

(251)

(209)

Total Equity

 

11,682

9,559

LIABILITIES

 

 

 

Non-Current Liabilities

 

 

 

Employee termination benefits

 

3

30

Current Liabilities

 

 

 

Trade and other payables

 

284

413

Total Liabilities

 

287

443

Total Equity and Liabilities

 

11,969

10,002

 

Statement of consolidated changes in equity

 

 

Attributable to owners of the Company

Non-Controlling Interest

 

 

 

 

Share Capital

Share Premium

 

Other Reserves

Retained earnings

 

Total

 

Total Equity

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

Balance at 1 January 2019

 

4,908

21,253

1,701

(16,427)

11,435

(103)

11,332

 

Comprehensive income for the year:

 

 

 

 

 

 

 

 

- loss for the year

 

-

-

-

(1,554)

(1,554)

(106)

(1,660)

 

- other comprehensive income

-

-

(138)

-

(138)

-

(138)

 

Total comprehensive income for the year

 

 

-

 

-

 

(138)

 

(1,554)

 

(1,692)

 

(106)

 

(1,798)

Share-based payments

 

 

-

25

-

25

-

25

 

Share options expired

 

-

-

(403)

403

-

-

-

 

Total contributions by and distributions to owners of the Company

 

 

-

 

-

 

(378)

 

403

 

25

 

-

 

25

 

Balance at 31 December 2019

 

4,908

21,253

1,185

(17,578)

9,768

(209)

9,559

 

Comprehensive income for the year:

 

 

 

 

 

 

 

 

- loss for the year

 

-

-

-

(278)

(278)

(42)

(320)

 

- other comprehensive income

-

-

(50)

-

(50)

-

(50)

 

Total comprehensive income for the year

 

 

-

 

-

 

(50)

 

(278)

 

(328)

 

(42)

 

(370)

 

Issue of share capital net of expenses

759

1,609

-

-

2,368

-

2,368

 

Share-based payments

-

-

125

-

125

-

125

 

Share options expired

-

-

(76)

76

-

-

-

 

Total contributions by and distributions to owners of the Company

 

 

759

 

1,609

 

49

 

76

 

2,493

 

-

 

2,493

 

Transfer between reserves

-

-

407

(407)

-

-

-

 

Balance at 31 December 2020

 

5,667

22,862

1,591

(18,187)

11,933

(251)

11,682

 

                             

 

 

 

Statement of consolidated cash flows

 

 

 

Year ended

31 December 2019

 

Year ended

31 December 2020

 

 

£'000

£'000

Cash flow from operating activities:

 

 

Net cash used in operating activities

(927)

(560)

Cash flow from investing activities:

 

 

Purchase of property, plant and equipment

(46)

(2)

Proceeds from disposal of financial assets

172

-

Purchase of intangible assets

(144)

(711)

Tax received

165

142

Interest received

-

7

Net cash generated/(used in investing activities)

147

(564)

Cash flow from financing activities:

 

 

Net funds received from issue of shares

2,368

-

Net cash generated from financing activities

2,368

-

Net increase/(decrease) in cash and cash equivalents

1,588

(1,124)

Cash and cash equivalents at beginning of the period

163

1,287

Cash and cash equivalents at end of the period

1,751

163

       

 

 

 

 

Notes to the consolidated financial statements

 

1.  Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), 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 2020 or the year ended 31 December 2019 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 2020 and 31 December 2019 have been reported on by the Independent Auditors.  The Independent Auditors' Reports on the Annual Report and Financial Statements for 2020, was unmodified, did not draw attention by way of emphasis of matter 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 2019 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 2019 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 2020 the Group had cash and cash equivalents of £1,751k and no borrowings. Having considered the prepared cashflow forecasts and Group budgets, and the funds received so far this year (£678k) and also potentially receivable (£1.47m) from share warrant exercises in 2021, 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 warrant exercises will match the Board's expectations, and this may affect the Group's ability to carry out its work programs as expected.

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

£'000

 At 31 December 2020

 

 

 

 

 

 

 

 

 Intangible assets

 

-

-

7,771

-

7,771

 

 Property, plant and equipment

 

1

-

46

14

61

 

 Investment in associate companies

 

-

1,449

-

-

1,449

 

 Cash and other assets

 

58

784

95

1,751

2,688

 

 Liabilities

 

(47)

-

(19)

(221)

(287)

 

 Inter-segment

 

(3,264)

-

(2,354)

5,618

-

 

 Net assets/(liabilities)

 

(3,252)

2,233

5,539

7,162

11,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration

UK support & other

Group

 

 

 

Turkey

East Africa

West Africa

Total

 

 

 

£'000

£'000

        £'000

£'000

£'000

 

 At 31 December 2019

 

 

 

 

 

 

 

 Intangible assets

 

-

-

7,244

-

7,244

 

 Property, plant and equipment

 

1

-

-

20

21

 

 Investment in associate companies

 

-

2,250

-

-

2,250

 

 Cash and other assets

 

80

165

41

201

487

 

 Liabilities

 

(98)

-

(5)

(340)

(443)

 

 Inter-segment

 

(2,617)

-

(2,213)

4,830

-

 

 Net assets/(liabilities)

 

(2,634)

2,415

5,067

4,711

9,559

 

 

 

 

 

 

 

 

 

 

                   

 

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

2020

 

 

 

 

 

 

 Administration expenses

 

(62)

-

(87)

(861)

(1,010)

 Depreciation charge

 

-

-

-

(8)

(8)

 Other income/(losses)

 

162

203

-

-

365

 Share of associate company losses

 

-

(132)

-

-

(132)

 Exchange gains/(losses)

 

(11)

(71)

470

(71)

317

 Inter-segment charges

 

-

-

(218)

218

-

 Income tax

 

(17)

-

-

165

148

Profit/(loss) for year

 

72

-

165

(557)

(320)

             

 

 

 

 

 

Exploration

UK support & other

Group

 

 

 

Turkey

East Africa

West Africa

Total

 

 

 

£'000

£'000

        £'000

£'000

£'000

 

2019

 

 

 

 

 

 

 

 Administration expenses

 

(373)

-

(142)

(1,034)

(1,549)

 Depreciation charge

 

(1)

-

-

(6)

(7)

 Other income/(losses)

 

149

446

-

5

600

 Share of associate company losses

 

-

(338)

-

-

(338)

 Exchange gains/(losses)

 

(5)

-

(437)

(3)

(445)

 Inter-segment charges

 

(148)

-

(103)

251

-

 Income tax

 

(63)

-

-

142

79

Profit/(loss) for year

 

(441)

108

(682)

(645)

(1,660)

              

 

 

3.  Investment in equity-accounted associates

 

 

2020

2019

 

 

£'000

£'000

At1January

2,250

2,250

Exchangemovements

(71)

(108)

Share of losses

(69)

(126)

Transfer to other financial assets

(801)

-

Release of impairment provision

203

446

Loss on change of ownership interest

(63)

(212)

At31December

1,449

2,250

 

The balance at 31 December represents the Company's investment in Thani Stratex Resources Limited ("TSRL") group of companies. The shareholding interest reduced from 26.10% at 31 December 2019 to 24.92% at 31 December 2020.

4.  Financial assets

Financial assets at fair value through other comprehensive income

 

Group

 

2020

2019

 

£'000

£'000

At1January

165

414

Disposals

(165)

(9)

Transfer from equity accounted associates

395

-

Fair value adjustment

-

(240)

At 31 December

395

165

 

Financial assets at fair value through other comprehensive income comprises an 10.61% investment in Thani Stratex Djibouti, after that company was spun out of Thani Stratex Resources Limited. The 12.27% investment in Tembo Gold Corporation was disposed of during the year, resulting in a loss of £1k.

 

 

5.  Intangible assets

The Group's Intangible assets comprise entirely of exploration assets.

 

 

  Group

 

2020

2019

 

Cost

£'000

£'000

Cost at 1 January

7,244

6,780

Exchange movements

343

(328)

Additions

184

792

At 31 December

7,771

7,244

 

The capitalised cost of the principal projects and the additions during the year are as follows:

 

 

Capitalised cost

Additions in year

 

 

 

 

2020

2019

2020

2019

 

 

 

 

 

£'000

£'000

£'000

£'000

 

 

West Africa

 

 

 

 

 

 

 

 

Senala

 

6,568

6,225

-

-

 

 

 

Bibemi / Wapouze

 

1,203

1,019

184

792

 

 

Total Intangible assets

 

7,771

7,244

184

792

 10,490,725

 

 

 

 

** ENDS **

 

 

Competent Persons Statement 

The information in this release that relates to Exploration Results has been compiled by Claire Bay (VP 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.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014, which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Following the publication of this announcement, this inside information is now considered to be in the public domain.

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

 

Oriole Resources PLC

Bob Smeeton / Tim Livesey / Claire Bay

 

 

Tel: +44 (0)20 7830 9650

Blytheweigh (IR/PR contact)

Tim Blythe / Megan Ray / Rachael Brooks

 

Tel: +44 (0)20 7138 3204

 

Grant Thornton UK LLP

Samantha Harrison / Seamus Fricker / George Grainger

 

 

Tel: +44 (0)20 7383 5100

 

Shard Capital Partners LLP

Damon Heath / Erik Woolgar / Isabella Pierre

 

 

Tel: +44 (0)20 186 9900

 

 

 

Notes to Editors:

 

Oriole Resources PLC is an AIM-listed exploration company, operating West Africa. It is focused on early-stage exploration in Cameroon (Bibemi, Wapouzé and Central Cameroon projects) and the more advanced Senala gold project in Senegal, where IAMGOLD has the option to spend US$8 million to earn a 70% interest. Year two commitments have been met at Bibemi, Wapouzé and Senala. The Company has several interests and royalties in companies operating throughout Africa and Turkey that could deliver future cash flow, and it continues to assess new opportunities in both regions.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

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