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Oriole Resources PLC - Sale of Karaagac Mining Royalty

RNS Number : 2509W
Oriole Resources PLC
17 August 2020
 

Oriole Resources PLC

 

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

 

Sale of Karaağac Mining Royalty

 

Oriole Resources PLC (AIM: ORR), the AIM-quoted exploration company focused on West Africa, is pleased to announce that it has signed a US$300,000 sale agreement ('Sale Agreement') with its joint venture partner Anadolu Export Maden Sanayi ve Ticaret Limited Şirketi ('Anadolu'), in relation to the Karaağac mining royalty in Turkey. Oriole has received an initial tranche of US$50,000 in cash from Anadolu, with the balance contingent upon the commencement of mine construction at the Karaağac project ('Karaağac' or the 'Project').

 

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 to help fund a drilling programme at the Company's Bibemi project in Cameroon, planned for H2-2020 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. After extensive discussions with a number of royalty companies, an offer we received, and accepted, triggered Anadolu's right of first refusal, common to most of these arrangements, and Anadolu has taken the opportunity to exercise its right.

 

"As announced on 29 October 2019 Anadolu owes the Company US$425,000 in outstanding success-based payments. Resolution of the royalty position now offers us the opportunity to pursue all available routes to recover this amount and we look forward to constructive discussions in the coming weeks."

 

 

 

Further Details

 

In 2015, the Company signed an exploration agreement ('Exploration Agreement') with Turkish company Anadolu, 96%-owned by Istanbul-listed ODAŞ Elektrik, whereby the licences were transferred to Anadolu in return for its commitment to spend up to US$1.5 million on exploration and drilling at the Project within two years (announcement dated 2 February 2015). Permitting delays led to an extension to the two-year exploration period and in Q1-2019, Anadolu completed the investment and announced the definition of a JORC-2012 compliant Indicated and Inferred Mineral Resource of 348,150 oz gold ('Au') and 2,832,036 oz silver ('Ag'). The resource definition triggered a success-based payment to Oriole of US$0.5 million, which the Company agreed to receive in staged payments of US$25,000 per month for 20 months, and the Company's interest was reduced to a 1.5% NSR royalty on any future mineral production at the Project (announcement dated 11 March 2019). The royalty has been accounted for in the financial statements of the Company with no carrying value ascribed to it. After making the initial three payments, Anadolu defaulted on the further payments and currently owes the Company US$425,000.

 

Oriole today announces that it has signed a US$300,000 Sale Agreement with Anadolu, following Anadolu's exercise of its right of first refusal to purchase the Karaağac royalty by matching a third-party offer. The Company has received the first tranche of US$50,000 in cash and will receive the second tranche of US$250,000 upon initiation of mine construction activities at the Project. 

 

Mine construction is pending receipt of a positive Environmental Impact Assessment at the Project. In the event of non-payment of this element of the consideration the royalty rights will revert back to the Group, in full.

 

The Company will continue to seek repayment of the outstanding US$425,000 and is confident of its eventual recovery.

 

 

 

** 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, 

or contact:

 

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.

 


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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