Oriole Resources PLC
('Oriole' or 'the Company')
Sale of Hasançelebi & Doğala Mining Royalties
Oriole Resources PLC (AIM: ORR), the AIM-quoted exploration company focused on West Africa, is pleased to announce that it has signed a US$250,000 sale agreement (the 'Sale Agreement') with its Joint Venture partner Bati Toroslar Madencilik Sanayi ve Ticaret Ltd. Ști ('Bati Toroslar') in relation to its Hasançelebi and Doğala mining royalties in Turkey. The Sale Agreement will provide US$30,000 within seven days, with the balance contingent upon the commencement of mine construction at either Hasançelebi or Doğala. These royalties have no carrying value in the financial statements of the Company.
The sale is in line with the Company's previously stated strategy of asset monetisation and follows the recent sale of its shares in Tembo Gold Corp. that delivered net proceeds of £172,000 (announcement dated 25 February 2020). It is intended that any proceeds received through asset sales will primarily be used towards a drilling programme at the Company's Bibemi project in Cameroon, planned for Q4-2020 subject to ongoing developments around Covid-19.
Oriole Resources CFO, Bob Smeeton, said: "The sale of the legacy royalty portfolio is a part of our asset realisation strategy. Offers we receive and accept from third parties trigger the partners' right of first refusal, which is common to most of these arrangements. Bati Toroslar has taken the opportunity to exercise its rights. Given the prospect of receiving a US$500,000 success-based payment from Bati Toroslar as exploration work develops and a further US$220,000 once mine construction starts, it is encouraging to see its management's confidence in the projects as demonstrated by their acquisition of these royalty rights.
"We understand drilling is to commence at Hasançelebi shortly, guided by our Turkish team, and we look forward to making rapid progress towards the success-based payment, and the contingent consideration element of this deal."
In Q4-2019, the Company signed a US$1.38 million exploration agreement ('Exploration Agreement') with Bati Toroslar for the development of its early-stage Hasançelebi and Doğala gold projects in Turkey (together 'the Projects'; announcement dated 29 October 2019). Under the terms of the Exploration Agreement, the licences were transferred to Bati Toroslar whilst Oriole retained its right to a 1.5% NSR royalty on any future precious metals production at the Projects, and a 5.0% NSR royalty on the future production of any other metals or industrial raw minerals.
Oriole today announces that it has signed a US$250,000 Sale Agreement with Bati Toroslar, following Bati Toroslar's exercise of its right of first refusal to purchase the Hasançelebi and Doğala royalties by matching a third-party offer. The Company will receive the first tranche of US$30,000 in cash within the next seven days and will receive the second tranche of US$220,000 in cash upon initiation of project construction activities at either Hasançelebi or Doğala.
The sale of the royalties is independent of a success-based payment due from Bati Toroslar upon resource definition at Hasançelebi, a condition of the original Exploration Agreement. Bati Toroslar is currently paying the Company TL70,000-TL100,000 per month to manage the exploration programmes at both Projects. If a minimum JORC-compliant Indicated or Measured gold resource of 100,000 oz, (with a 0.3 gramme per tonne cut off) is defined within the oxide and transition zones at Hasançelebi, Bati Toroslar is required to pay Oriole US$500,000 provided that results from metallurgical test and Environmental Impact Assessment ('EIA') work are encouraging and if a positive development decision is made.
Following the recent completion of topographical mapping at the Hasançelebi licence, Bati Toroslar anticipates completing a planned 8,030 metre (121 hole) diamond drill programme before the end of the year. Oriole does not intend to publish these drilling results. However, the Company will keep the market updated on the overall progress of the Projects insofar as it impacts the delivery of the contingent consideration.
** ENDS **
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. 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,
Oriole Resources PLC
Tim Livesey / Bob Smeeton / 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 / Niall McDonald
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, focussed on West Africa. It is focused on early-stage exploration in Cameroon (Bibemi and Wapouzé projects) and the more advanced Senala gold project in Senegal, where IAMGOLD has the option to spend US$8m to earn a 70% interest. Year 2 commitments have been met at all three projects. 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.