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Oriole Resources PLC (ORR)

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Wednesday 09 March, 2022

Oriole Resources PLC

Final Results and Notice of AGM

RNS Number : 0942E
Oriole Resources PLC
09 March 2022
 

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 focussed on West Africa, announces its final results for the year ended 31 December 2021.

Copies of the Company's Annual Report will be posted to shareholders on or before 31 March 2022. The Company's Annual General Meeting ('AGM') will be held at 11.00am on 26 April 2022 at the offices of Grant Thornton UK LLP, located at 30 Finsbury Square, London, EC2P 2YU.

 

Operational Highlights:

· Three phases of diamond drilling completed at the Bibemi project in Cameroon for a total 6,154.10 metres ('m');

· Commencement of exploration at the 3,592 km2 Central Licence Package project in Cameroon, following the award of eight contiguous licences in Q1-2021;

· At the Senala project in Senegal, IAMGOLD Corporation ('IAMGOLD') completed 689.50 m diamond drilling at the Faré South target and a total of 7,002 m reverse circulation ('RC') drilling over the Faré Far South and Faré North targets. The results enabled the delivery of a Maiden Resource Estimate of 155,000 oz gold ('Au') grading 1.26 grammes per tonne ('g/t') Au in the Inferred category at Faré South and has indicated a high probability for further resource definition at the other two targets.

· Subsequent to the year end, IAMGOLD confirmed that it had met the expenditure requirements to exercise its option to acquire an initial 51% interest in Senala.

 

Financial Overview:

· Incoming funds totalling £2.43 million have allowed for £1.78 million of direct exploration expenditure in Cameroon, as the Group advanced its projects;

· Operating loss of £1.44 million for the year to 31 December 2021 (2020: £0.34 million), which includes an adverse £0.89 million swing in unrealised foreign exchange movements;

· Administrative expenses increased to £1.08 million (2020: £1.02 million) following the unwinding of cost saving measures introduced in 2020 in response to Covid-19.

 

 

Tim Livesey, CEO of Oriole, commented: 

"2021 has proven to be a bounce-back year for Oriole, with the award of the new licence package in central Cameroon, follow-on exploration drilling programmes at Bibemi, in the north of the country, and the successful completion of a maiden Mineral Resource Estimate at Senala, in Senegal, where our JV partner, IAMGOLD has also continued to advance exploration.

"Our team has delivered across all projects with a 100% success rate:

· We have identified gold anomalism along an extensive trend (in excess of 35km) in our new frontier at the Central Licence Package ('CLP') project in Cameroon;

· We have drill confirmation of mineralised gold systems on the Bibemi licence, with diamond drill intercepts confirming a vertical and lateral continuation of the gold anomalism we previously identified at surface;

· We have completed a maiden Mineral Resource Estimate for the central 'Far é South' target on the Senala licence, with IAMGOLD continuing to extend the known mineralisation at Far é South and Far é North, and intersecting new, wide zones of high-grade mineralisation at Far é Far South.

"All of this has been completed with a marginal increase in G&A spend, reflecting the unwinding of certain cost-saving measures implemented as a response to the pandemic in 2020.

"Most importantly, the programmes have all advanced quickly and efficiently, with a high percentage of the Group's spend being on direct exploration, allowing us to "succeed or fail fast". In this way, we ensure our investors' money is spent efficiently, in a targeted way and on those projects that best merit further focus and development.

"Progress has been made on our legacy assets and investments, with the ongoing advancement toward royalty stage at our Turkish assets, continued exploration on the Djibouti exploration assets and with a new private company investing into TSR's assets in Egypt.

"2021 has been a year of steady and successful progress across all fronts and we are excited to be entering 2022 in such a strong position."

 

 

 

 

Chairman's Statement

I am delighted to have stepped into the role of Chair of Oriole in the last month and I am looking forward to working with the team to push the business forward at what is an exciting stage of its development. The Board I'm joining took up their responsibilities in 2018, at a time when the Group was poorly funded, had a falling market capitalisation and had no active exploration projects of its own. The hard work completed over the past four years has delivered significant progress, with a determined and aggressive return to early-stage exploration, opening up the new gold exploration frontier of Cameroon and following the value creation path of a well-run junior exploration company.

Exploration companies don't always see the increasing share price their results deserve, as these gains tend to come in sharp rises around resource estimate announcements, and so I am glad to see the team pursuing an aggressive business model, designed to deliver results quickly and at the lower end of the cost curve.

Oriole follows the principles of good exploration but also combines that with the benefits of a project generator model. Single-project companies carry a high level of risk geologically, operationally, and geo-politically, but spreading that risk by having multiple projects in different countries within the region should provide a more secure route to Group success. The Company has operated a project generator model for many years and retains a number of legacy positions that it actively manages with a view to realising cash to fund its ongoing exploration.

 

Operations

Senala, Senegal

At Senala, IAMGOLD continued to push forward with its earn-in, completing significant drill programmes either side of the West African rainy season. In 2021, IAMGOLD delivered 7,002m of RC drilling and 689m of diamond drilling at the northernmost Faré prospect, and 4,912m of RC drilling at the Madina Bafé prospect in the south. IAMGOLD has confirmed that it has met the initial US$4 million of expenditure across the first four years of the Option Agreement dated 28 February 2018 required in order to secure a 51% interest in the Senala project and that it intends to exercise this option once the expenditure figures have been reviewed and agreed with the Company.

The work completed at the Faré South target, when combined with drilling results achieved by Oriole prior to the Option Agreement, enabled the Group to publish a maiden resource estimate of 155,000 oz Au grading 1.26 g/t Au (announcement dated 23 August 2021). IAMGOLD's subsequent drilling confirmed further substantial gold anomalism around this system, reinforcing management's belief that Faré has the potential to host a stand-alone deposit.

Bibemi, Wapouzé and the Central Licence Package, Cameroon

Progress at Bibemi has been rapid during 2021, with three phases of drilling completed on the licence for 6,154m. Early in the year, our maiden drilling programme tested four targets and confirmed gold at each of them. At the Bakassi Zone 1 target, we identified zones of mineralisation up to 12m wide and have further drill tested this area, with great success, in follow up programmes during the latter part of the year (announcement dated 9 February 2022). We are increasingly confident that the gold anomalism observed at Bakassi Zone 1 extends a further 3km along strike towards the Lawa West target, offering ample opportunity to expand the exploration programmes. Due to the structural complexity at Lawa West and Lawa East, we are currently undertaking a geophysics programme in the area with the aim of identifying more drill targets.

Exploration at Wapouzé is less advanced than at Bibemi, although soil sampling in 2019 identified cumulative gold anomalism over 13km in length.  Results from the follow-up 2021 trenching work programme returned grades of up to 2.00m grading 4.06 g/t Au (announcement dated 9 February 2022). 

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'), we have reached the required milestones to take 90% ownership of both licences. We have submitted the paperwork for the transfer of these licences to our local subsidiary and await confirmation from the Ministry of Mines that the administrative process and transfer have been completed.

Early in the year, we were delighted to receive confirmation of eight licence awards for the Central Licence Package ('CLP') project in central Cameroon (announcement dated 3 February 2021). This provides a contiguous 3,952km2 block of licences, covering an area that is highly prospective for orogenic-style gold mineralisation. 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. As with Bibemi and Wapouzé, we are awaiting confirmation of their transfer into our legal ownership thereby formalising our 90% ownership.

Work at the CLP project has been progressed quickly. Following an initial remote sensing study early in 2021, we were able to undertake a stream sediment sampling programme across the five easternmost licences before the rainy season took hold mid-year. Follow-up work has already commenced based on the results of that work and a stream sediment programme is planned for the three western licences. Results to date have been very encouraging, confirming significant zones of gold anomalism.

We 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, which will ultimately make it easier to operate in Cameroon, as having more active companies will increase the availability of skilled labour and drilling equipment.

Investments and Royalty positions

The Group has a range of investment and potential royalty positions arising from its exploration activities in prior years. We take an active interest in managing these positions, with the ultimate goal of maximising shareholder value, either through realisation or conversion into a royalty position. The most significant positions within the Group are set out below.

Thani Stratex Resources ('TSR')

The Group holds a 24.92% interest in TSR, the legacy of a joint venture with Thani Ashanti Alliance Limited ('Thani Ashanti'), that is focussed on the Hodine licence in Egypt. During the year, TSR entered into an earn-in agreement with Red Sea Resources Limited ('RSR'), by which RSR resolved a number of outstanding liabilities in return for an initial 7% stake and now has the option to earn an overall 85% interest by incurring US$2.2 million of exploration expenditure by March 2023. It is ultimately expected that TSR's position will convert to a 1.5% royalty as RSR advance this project to production. With resources totalling 729,000 oz Au already identified on the licence, there is an expectation that the Group's equity share of this royalty could be of appreciable value.   

Thani Stratex Djibouti ('TSD')

TSD is focussed on the exploration of gold projects in Djibouti and is another legacy asset arising from the historical joint venture with Thani Ashanti, with Oriole's interest currently standing at 9.21%. Whilst we maintain board representation, we are increasingly frustrated by the slow progress being made as it is creating a high ratio of G&A to exploration expenditure. The projects have great promise, having delivered encouraging results including 15m grading 4.08 g/t Au (announcement dated 22 December 2020) but a faster rate of progress is needed in order to deliver an effective and financially efficient exploration programme.

Turkey

The Company's first projects were in Turkey and residual interests are still held across a number of licences. The ownership of all these licences has now passed to third-parties, who are advancing the projects. In 2022, we will maintain a representative presence in Turkey in order to maximise returns from these remaining interests.

Chief among these is our 1.2% royalty in the Muratdere copper-gold project in Turkey. The Company's joint-venture partner, Lodos Maden Yatırım Sanayii ve Ticaret A.Ş. ('Lodos'), is close to submitting its Environmental Impact Assessment ('EIA') report and we await the successful conclusion of this key phase. With a copper price that has risen by 60% over the last two years, we see significant value attaching to this asset as it moves through the regulatory phases.

Elsewhere in Turkey, we have ongoing court cases for the recovery of US$425k from Anadolu Export Maden Sanayi ve Ticaret Limited Şirketi ('Anadolu') and US$960k from NTF Insaat Ticaret Ltd Sti ('NTF'), both former joint-venture partners. These debts are fully provided against in the financial statements, but we hold a very strong legal position in both cases and anticipate an eventual successful resolution.

At the Hasançelebi and Doğala gold projects in Turkey, the Company signed an exploration agreement with Turkish private company Bati Toroslar Madencilik Sanayi ve Ticart Ltd. Sti ('Bati Toroslar') in 2019. 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 ongoing through 2021 and work towards resource definition is progressing.

Covid-19

The management team successfully adapted the Group to work within the restrictions imposed by the Covid-19 pandemic. Whilst restrictions are easing in the UK, it is important to remember that we work in parts of the world where the vaccine rollouts are still in progress. As such, although we expect there to be little impact on our operations in 2022, we continue to monitor the situation carefully. During 2021, we arranged for the vaccination of our Cameroonian workforce, on a voluntary basis, and will ensure this facility remains available to our team.

AGM Update 

The Company's AGM is scheduled for 26 April 2022 at the offices of Grant Thornton UK LLP, 30 Finsbury Square, London, EC2P 2YU. Whilst we expect this will be an open meeting, the Company encourages all shareholders to vote via proxy form in advance of the meeting date. The Company shall inform shareholders via regulatory announcement if the meeting needs to revert to being a closed meeting.

Outlook

On behalf of the Board, I would like to thank John McGloin for his work over the last three and a half years. He has led the Board ably through that period and leaves with the best wishes from us all. John leaves the Group in good shape and with a clear strategy to deliver shareholder value by performing high-quality exploration work in highly prospective gold districts. The results at Bibemi offer great encouragement and the opportunity provided by the Central Licence Package, a district-scale play that is already proving to host significant gold anomalism, is huge.

I'm very pleased to be taking over from John at this exciting stage. We have a strong team throughout the business and, on behalf of Oriole's Board of Directors, I would like to express our appreciation and thanks to all of our employees for their continued dedication and professionalism during the past year, and our shareholders for their continued support.

 

 

 

Eileen Carr

Non-Executive Chair

8 March 2022

 

 

 

 

 

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. The Board seeks to acquire exposure to highly-prospective districts, primarily in West Africa, and the Group has developed a first-mover position in Cameroon, an exciting new frontier for gold-exploration. The Board aims to develop a portfolio of projects that cover a range of mineral deposits across multiple jurisdictions, thus mitigating sovereign, technical and operational risks.

The Group finances its activities through the monetisation of more advanced projects and through periodic capital raisings.

Organisation overview

The Board of Directors was fully refreshed in 2018 and was strengthened during 2021 by the appointment of Claire Bay, Executive Director for Business Development and Exploration, who has been a key member of the Group's management team for a number of years. In December 2021, the Company announced that John McGloin would retire from the Board in February. The directors took this opportunity to refresh the balance of the Board, with the appointment of Eileen Carr, who has held finance related roles in the Natural Resources sector since the early 1990's. The Company is delighted to have Eileen on board and gives John its best wishes in his new role as Chief Executive Officer of Diamond Fields Resources Inc. The Board is ably supported by a management team that, for many years, has delivered successful exploration projects.

Business environment

The price of gold was relatively stable during the year, with a  small decrease from an opening position of US$1,894 per ounce, to US$1,815 per ounce at 31 December 2021. This level of gold price has been sustained since July 2020 and, in the context of Oriole, is 50% higher than when the Company was rebranded in 2018.

In addition, there are steadily diminishing proven resources at the main gold producers and so the Board believes the need to find new resources will ultimately drive their increased appetite for supporting the activities of junior exploration companies like Oriole.

Business performance

2021 Operations

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

Impact of Covid-19

Coming into 2021, the Covid-19 pandemic was still very much an issue globally but had limited impact on the Company's operations. The Group has been operational in Cameroon for the whole of 2021, with three phases of drilling completed and extensive work programmes continuing across all its licences.

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. As 2020 ended, it became clear that Oriole could function as normal in the 'new world' and so these measures were unwound to return employees and suppliers back to contractual rates. The Group continues to work flexibly, and with staff safety a prime concern, but the UK team has been operating from the Company's Exploration Office in Eastleigh whenever government regulations have allowed.

The Board believes the impact of Covid-19 on its 2022 operations will not be significant but it continues to monitor the situation.

Active Exploration projects

The primary focus for the Group's own exploration activities is its position in Cameroon. In 2018, the Group signed an earn-in agreement with BEIG3 to gain a majority interest in the Bibemi and Wapouzé licences in northern Cameroon. Work on the licences in 2019 and early 2020 provided encouraging results and, in early 2021, a maiden drilling programme was completed for 3,118m at Bibemi. The Group subsequently completed two further phases of more targeted drilling during H2-2021 and continues to be encouraged by the results. The Bakassi Zone 1 prospect has been the main focus of the drill campaigns to date and the mineralised corridor has been confirmed over more than 1km of strike; it remains open in all directions and at depth. Work is continuing in 2022, with a geophysical survey already underway to further understand the structures at three additional targets, namely Lawa West, which may prove to be an extension of the Bakassi Zone 1 prospect, Lawa East and Bakassi Zone 2. The geological team is currently designing follow-up programmes.

Trenching at Wapouzé has also been completed and all data is currently being reviewed ahead of designing future programmes.

The Group has now reached the expenditure target defined within the 2018 option agreement signed with BEIG3 and is moving through the process to take 90% ownership of both licences.

Additionally, in 2019, the Group applied for a district-scale package of licences - the Central Licence Package - 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. The licence grants were received in February 2021 and a regional stream sediment sampling programme was completed across five of the licences early in 2021. Results from those samples enabled the geological team to target significant areas of gold anomalism, within specific drainage basins, and a substantial targeted soil sampling programme commenced in autumn 2021. That programme is still ongoing and similar programmes of stream sediment sampling and soil sampling are planned to be completed on the three remaining licences in 2022.

At the 472km2 Senala licence in Senegal, Canadian-listed gold miner IAMGOLD focussed on diamond and RC drilling at both the Madina Bafé and Faré targets, with particularly good results returned from Faré. During the year, the Company independently commissioned a maiden Mineral Resource Estimate for the Faré South target and announced an initial resource of 155,000 oz grading 1.26 g/t Au in the Inferred category, within a larger Exploration Target of up to 280,000 oz Au grading 1.10 g/t Au. This does not include any of the potential resources from the Faré North and Faré Far South targets, with recent drilling at the latter having delivered up to 35.00m grading 3.61 g/t Au. Under the terms of the Option Agreement, IAMGOLD was obligated to spend US$4 million on the licence by 28 February 2022. The Company has now received confirmation from IAMGOLD that, subject to review by the Company, the expenditure target has been reached. Subject to review and confirmation of this point, the first option will be triggered and IAMGOLD will move to a 51% ownership position.

Investment and royalty positions

The Company has a long history of gold and base metal exploration success. This history has left it with a valuable portfolio of legacy assets throughout East Africa and Turkey, which are the subject of an on-going asset realisation programme. The management team actively manages these assets, including taking up Board positions where possible in order to assist with value maximisation. Two of these asssets, a 24.92% holding in TSR, and a 9.21% holding in TSD, arise from a legacy joint-venture agreement between the Company, whilst under previous management, and Thani Ashanti.

The investment in TSR covers the Hodine licence in Egypt that hosts the Anbat and Hutite projects. At Hutite, former operator Thani Ashanti drilled over 30,000m 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 11.41 million tonnes grading 1.41 g/t Au for 520,000 ounces (in-situ) 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). Operation of this project has now been taken over by RSR, who has acquired an initial 7% interest and is spending US$2.2 million to earn a total 85% interest in the Hodine licence.  Progress has been rapid and focussed, with 2,300 m of drilling completed in the final two months of 2021. Whilst the Company will see its ownership diluted, the ultimate aim is for Oriole to retain a significant interest in the 1.5% royalty that will go to TSR upon that company being diluted below a 10% holding in Hodine.

Disappointingly, the progress at TSD has been less impressive. TSD became a standalone vehicle in late 2019 and is now funded and managed independently of TSR. The company is focussed on the exploration of epithermal gold projects in Djibouti, namely Pandora, Assaleyta and Hesdaba, with African Minerals Exploration & Development Fund III ('AMED Fund lll') having taken over operational control in 2019, following a general meeting of the shareholders in TSR who at that time held 50% of TSD and had operational control. Unfortunately, though Oriole voted against the deal proposed, a majority voted in favour and control passed to AMED Fund lll. After initial encouraging signs, whereby the Company was able to report 6,907.50m  drilled in 2020, progress has slowed substantially whilst costs have far out-stripped the exploration progress made. In the last nine months of 2021, TSD managed to drill only 887.70m and have now drilled only 10,990.70m in two years at a cost of well over US$5 million. This arrangement has significantly diluted minority shareholders without adding significant value to TSD overall. The Board still firmly believes in the potential of the Djibouti licences but the well-funded aggressive exploration programme that was outlined to the TSR shareholders in 2019, of 40,000m drilling within three years and development of resources, has failed to materialise which, even taking Covid-19 into account, is disappointing.

With Turkey continuing to face economic issues, which impacted the Group's consultancy income, the Board took the decision to close the Company's Turkish office. The Group has put in place arrangements to manage its interests in Turkey, with up to US$2.4 million 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 , is still ongoing. During the year, the Group won an interim injunction against Anadolu and were able to send lawyers into the company's Ankara offices to ascertain what assets would be available. Turkish justice has moved slowly, particularly in light of Covid-19, but it is moving in the right direction. The Group is now working to bring the parent company, Odaş Electrik, into the interim injunction. In the meantime, the Group has rejected two unacceptable offers of settlement from Anadolu and remain extremly confident that, if this case makes it to court, the Group will win the full sum due, plus damages and costs. Following the sale of a royalty right to Anadolu in 2020, the Group is also contingently owed US$250k from Anadolu should the Karaaǧaç project receive Environmental Impact Assessment ('EIA') approval and move to mine construction. The Group continues to monitor progress on this and has retained the right to take the royalty back if Anadolu defaults on that payment.

The Group is also awaiting news of a US$960k debt owed by NTF, a former partner in Turkey, who defaulted on tax payments that were originally due in 2017. Progress on this has been held up by a preceeding case involving NTF but the Board hopes for a resolution of that case in 2022, which may allow a quick settlement with NTF.

Meanwhile, there has been good progress at the Hasançelebei project, with 11,421.40m drilled during the year. 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 contruction commences.

At the Muratdere copper-gold project in northern Turkey, the Company holds a 1.2% royalty position. The revised EIA for this project is close to submission by the Company's joint-venture partner, Lodos, with the expectation of a successful application. The Group continues to engage with royalty companies with regards to the sale of this asset.

 

 

Financial Review:

Whilst the loss for the year rose to £1,569k (2020: £320k), a significant proportion of this £1,249k increase, was due to the revaluation of the Senala project from Euros into Sterling at the year end. This revaluation contributed towards the £571k of foreign exchange losses in the year, compared to £317k of gains in the prior year. It is important to note that this adverse swing of £888k has no monetary impact on the Group.

Of the profit and loss items the Group has control over, it was pleasing to note only a small (6%) increase in administrative expenses to £1,083k (2020: £1,018k) which, given the unwinding of the cost saving measures taken in 2020 to protect the business from the financial uncertainty caused by the Covid-19 pandemic, is a very pleasing result. The Board remains committed to reducing administrative costs, whilst increasing investment in its geological programmes.

Two other significant profit and loss movements impacted the results for the year. Within other income, the net profit from the Turkish consultancy business dropped by £100k, reflecting a very difficult period for the Turkish economy. In response to consultancy sales dropping off, the Group has moved to reduce its exposure in Turkey and in 2022 will maintain only a part time presence, with the express aim of continuing to represent the Group's interests in the country, where there is an identifiable US$2.4 million of potential income, excluding the Muratdere royalty. These new managerial arrangements already show some promise, with a US$22k sale of a small antimony royalty completed subsequent to the year end.

Elsewhere, the 2021 tax refund for the Group's research and development activities was £119k less than that received in 2020. This reflects the fact that Covid-19 curtailed the 2020 field season, which is the basis of the expenditure behind the tax receipt in 2021. The Board expects the tax refund to return to a more significant level in 2022, given the Company's exploration spend of £1,778k in 2021.

The Group's stated aim is to use the funds available to advance its projects as effectively as possible. This means using as much of the funds available on exploration and as such, the Board is dedicated to following the exploration route to success by interpreting results, planning the next phase, raising capital and executing the plan. In the long run, this minimises the spend on administration whilst building value in the projects. The key KPI measure the Group has adopted is cash-flow based, measuring the spend on the intangible assets (the projects) against the total spend on operations and investing. On this measure, 63% of the 2021 spend was on direct exploration work on the licences. Of course, a significant proportion of the other costs are also geologically related as they include the wages of the senior management team. However, the Board believes it appropriate to use a measure readily accessible from the audited accounts.

In October 2021, the Company completed a £1.8 million fund raise and this, alongside funds from warrant exercises earlier in the year, enabled the Group to complete three phases of diamond drilling at Bibemi, totalling 6,154.10 m, and start work on the district-scale Central Licence Package that was granted to the Group in February 2021. The Board continues to target expedited exploration work, whilst at all times following the systematic exploration model that ensures exploration techniques are deployed at the appropriate time. The capitalised exploration expenditure of £2,018k demonstrates the determination of the Board to focus its available funding appropriately, on the projects themselves.

The Group continues to look for opportunities to raise cash from asset disposals, with the most frequently discussed asset being its 1.2% net smelter returns royalty on the Muratdere copper-gold project in Turkey. The Company received two non-binding offers during the year but the Board believes that once the regulatory hurdle of an approved EIA is achieved, the prospects for a sale at a much higher price will be enhanced. The residual holdings in Thani Stratex Resources and Thani Stratex Djibouti have been maintained at current carrying values. The Group continues to look for opportunities to realise value from these two projects.

 

Tim Livesey

Chief Executive Officer

8 March 2022

 

 

 

Financial Statements

 

Statement of consolidated comprehensive income

 

 

 

 

 

Year ended 31 December 2020

£'000

 

 

 

 

 

Year ended 31

December 2021

£'000

 

 

 

 

 

Continuing operations

 

 

 

Administration expenses

 

(1,083)

(1,018)

 

Other (losses)/profits 

(361)

682

 

Operating loss

 

 

(1,444)

(336)

 

Share of losses in equity-accounted investments

 

(30)

(69)

 

Loss on change of ownership interest

 

(133)

(63)

 

Loss before income tax

 

 

(1,607)

(468)

 

Income tax credit

 

38

148

 

Loss for the year

 

 

(1,569)

(320)

 

Other comprehensive income for the year

 

 

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

Exchange differences on translating foreign operations

 

 

44

(50)

 

Other comprehensive income for the year, net of tax

 

 

44

(50)

 

Total comprehensive loss for the year

(1,525)

(370)

 

 

 

 

 

Loss for the year attributable to:

 

 

 

 

 

Owners of the Parent Company

 

 

(1,687)

(278)

 

Non-controlling interests

 

 

118

(42)

 

Loss for the year

 

 

(1,569)

(320)

 

 

 

Total comprehensive loss for the year attributable to:

 

 

 

Owners of the Parent Company

(1,643)

(328)

 

Non-controlling interests

 

 

118

(42)

 

Total comprehensive loss for the year

 

 

(1,525)

(370)

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

  - basic and diluted, continuing operations

 

 

(0.10)

(0.03)

 

        

 

 

 

 

 

Statement of consolidated financial position

 

 

 

As at 31 December 2020

 

 

As at 31

December 2021

 

 

 

 

£'000

£'000

ASSETS

 

 

 

Non-Current Assets

 

 

 

Property, plant and equipment

 

48

61

Intangible assets (note 5)

 

9,376

7,771

Investments in equity-accounted associates (note 3)

 

1,449

1,449

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

 

395

395

Trade and other receivables

 

394

389

Deferred tax asset

 

-

14

 

 

11,662

10,079

Current Assets

 

 

 

Trade and other receivables

 

137

139

Cash and cash equivalents

 

1,361

1,751

 

 

1,498

1,890

Total Assets

 

13,160

11,969

EQUITY

 

 

 

Equity attributable to owners of the Company

 

 

 

Share capital

 

6,200

5,667

Share premium

 

24,758

22,862

Other reserves

 

1,606

1,591

Retained earnings

 

(19,838)

(18,187)

Total equity attributable to owners of the Company

 

12,726

11,933

Non-controlling interest

 

(133)

(251)

Total Equity

 

12,593

11,682

LIABILITIES

 

 

 

Non-Current Liabilities

 

 

 

Employee termination benefits

 

22

3

Current Liabilities

 

 

 

Trade and other payables

 

545

284

Total Liabilities

 

567

287

Total Equity and Liabilities

 

13,160

11,969

 

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 2020

 

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

 

Comprehensive income for the year:

 

 

 

 

 

 

 

 

- loss for the year

 

-

-

-

(1,687)

(1,687)

118

(1,569)

 

- other comprehensive income

-

-

44

-

44

-

44

 

Total comprehensive income for the year

 

 

-

 

-

 

44

 

(1,687)

 

(1,643)

 

118

 

(1,525)

 

Issue of share capital net of expenses

533

1,896

-

-

2,429

-

2,429

 

Share-based payments

-

-

7

-

7

-

7

Share options exercised or expired

-

-

(36)

36

-

-

-

 

Total contributions by and distributions to owners of the Company

 

 

533

 

1,896

 

(29)

 

36

 

2,436

 

-

 

2,436

 

 

Balance at 31 December 2021

 

6,200

24,758

1,606

(19,838)

12,726

(133)

12,593

 

                             

 

 

 

Statement of consolidated cash flows

 

 

 

Year ended

31 December 2020

 

Year ended

31 December 2021

 

 

£'000

£'000

Cash flow from operating activities:

 

 

Net cash used in operating activities

(1,072)

(927)

Cash flow from investing activities:

 

 

Purchase of property, plant and equipment

(15)

(46)

Proceeds from disposal of financial assets

-

172

Purchase of intangible assets

(1,778)

(144)

Tax received

46

165

Interest received

-

-

Net cash (used in)/generated from investing activities

(1,747)

147

Cash flow from financing activities:

 

 

Net funds received from issue of shares

2,429

2,368

Net cash generated from financing activities

2,429

2,368

Net (decrease)/increase in cash and cash equivalents

(390)

1,588

Cash and cash equivalents at beginning of the period

1,751

163

Cash and cash equivalents at end of the period

1,361

1,751

       

 

 

 

 

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 2021 or the year ended 31 December 2020 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 2021 and 31 December 2020 have been reported on by the Independent Auditors.  The Independent Auditors' Reports on the Annual Report and Financial Statements for 2021, was unmodified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006, but did include a material uncertainty in relation to going concern. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2020 did not contain a statement under 498(2) or 498(3) of the Companies Act 2006, 

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 2020 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 2021 the Group had cash and cash equivalents of £1,361k and no borrowings. Having considered the prepared cashflow forecasts, likely availability of investor support, the prospects for asset disposals, and Group budgets, the Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these financial statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the financial statements. There can be no assurance that the cash received from fund raises and asset sales will match the Board's expectations, and this may affect the Group's ability to carry out its work programs as expected.As noted above, in the Audit Report for the year ended 31 December 2021 the auditors have made reference to going concern by way of a material uncertainty.

2.  Segment reporting

The Group's main operations are located in Turkey, East Africa and West Africa. The Group's head office is located in the UK and provides corporate and support services to the Group and researches new areas of exploration opportunities. The management structure and the management reports received by the Directors and used to make strategic decisions reflect the split of operations. 

a)  The allocation of assets and liabilities by segment is as follows:

 

 

 

 

 

Exploration

UK support & other

Group

 

 

Turkey

East Africa

West Africa

Total

 

 

£'000

£'000

£'000

£'000

£'000

 At 31 December 2021

 

 

 

 

 

 

 

 

 Intangible assets

 

-

-

9,376

-

9,376

 

 Property, plant and equipment

 

-

-

36

12

48

 

 Investment in associate companies

 

-

1,449

-

-

1,449

 

 Cash and other assets

 

81

789

79

1,338

2,287

 

 Liabilities

 

(43)

-

(20)

(504)

(567)

 

 Inter-segment

 

(3,281)

-

(2,849)

6,130

-

 

 Net assets/(liabilities)

 

(3,243)

2,238

6,622

6,976

12,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                   

 

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

2021

 

 

 

 

 

 

 Administration expenses

 

(38)

-

(114)

(922)

(1,074)

 Depreciation charge

 

(3)

-

(4)

(2)

(9)

 Other income/(losses)

 

75

135

-

-

210

 Share of associate company losses

 

-

(163)

-

-

(163)

 Exchange gains/(losses)

 

(18)

28

(579)

(2)

(571)

 Inter-segment charges

 

-

-

(291)

291

-

 Income tax

 

(8)

-

-

46

38

Profit/(loss) for year

 

8

-

(988)

(589)

(1,569)

             

 

 

 

 

 

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)

              

 

 

3.  Investment in equity-accounted associates

 

Group

 

2021

 

£'000

£'000

At1January

1,449

2,250

Exchangemovements

28

(71)

Share of losses

(30)

(69)

Transfer to other financial assets

-

(801)

Release of impairment provision

135

203

Loss on change of ownership interest

(133)

(63)

At31December

1,449

1,449

 

The balance at 31 December represents the Company's 24.92% investment in Thani Stratex Resources Limited ("TSRL") group of companies. That Company's interest in the Hodine licence in Egypt has been reduced to a 93% stake following the introduction of an earn-in partner.

 

 

 

 

4.  Financial assets

Financial assets at fair value through other comprehensive income

 

Group

 

2021

2020

 

£'000

£'000

At1January

395

165

Disposals

-

(165)

Transfer from equity accounted associates

-

395

Fair value adjustment

-

-

At 31 December

395

395

 

Financial assets at fair value through other comprehensive income comprises an 9.21% investment in Thani Stratex Djibouti Limited.

 

 

5.  Intangible assets

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

 

 

  Group

 

2021

2020

 

Cost

£'000

£'000

Cost at 1 January

7,771

7,244

Exchange movements

(413)

343

Additions

2,018

184

At 31 December

9,376

7,771

 

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

 

 

Capitalised cost

Additions in year

 

 

 

 

2021

2020

2021

2020

 

 

 

 

 

£'000

£'000

£'000

£'000

 

 

West Africa

 

 

 

 

 

 

 

 

Senala

 

6,177

6,568

22

-

 

 

 

Cameroon

 

3,199

1,203

1,996

184

 

 

Total Intangible assets

 

9,376

7,771

2,018

184

 

 

 

 

 

** ENDS **

 

 

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.

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, @OrioleResources on Twitter, or contact: 

 

Oriole Resources PLC

Bob Smeeton / Tim Livesey / Claire Bay

 

 

Tel: +44 (0)20 7830 9650

BlytheRay (IR/PR contact)

Tim Blythe / Megan Ray / Rachael Brooks

 

Tel: +44 (0)20 7138 3204

 

Grant Thornton UK LLP

Samantha Harrison / George Grainger / Ciara Donnelly

 

 

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 in West Africa. It is focused on early-stage exploration in Cameroon (Bibemi, Wapouzé and Central Licence Package 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. 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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