logo-loader

Oriole Resources: Morphing into an African Explorer

Published: 11:44 17 Apr 2019 BST

Oriole Resources: Morphing into an African Explorer
Key Points
  • New image and impetus from an overhauled management team
  • Company is refocused on African projects
  • Earning in on projects in Cameroon - a relatively new frontier
  • Potential revenue streams from legacy Turkish project portfolio
  • A major as a joint venture (JV) partner in Senegal in the form of IAMGOLD
  • Africa is again being seen by investors as the most prospective and least explored territory in the mining universe
  • Cash stood around £1.3mln at the end of December, with another £0.5mln due in from the taxman in the near future
Introduction

This company may be familiar to many investors under its previous guise as Stratex International, when its focus was as a hybrid developer/project generator, with a strong bias towards Turkey.

 

Now Oriole Resources PLC is primarily an exploration company, operating in Africa and Europe but with some legacy exposure through investment in, and royalties on, the projects it incubated in Turkey since its listing in 2006.

 

Oriole is focused on early-stage gold exploration in Cameroon and the more advanced Dalafin gold project in Senegal, where Iamgold has the option to spend US$8mln to earn a 70% interest.

 

It also has residual interests and royalties in projects in Africa and Turkey that it anticipates will generate cash flow (and capital gains) in the future.

Investment Thesis

The great mining slump of 2012-16 caused many miners to question their models. Oriole (then Stratex) also did so and headed in a different direction pursuing advanced stage assets, but has now returned to basics with a focus on exploration in Africa and husbanding its Turkish asset portfolio. The company represents a hybrid of explorer and royalty company. The development is in Africa and the royalty business is primarily net smelting royalties on long-held Turkish assets.

 

Africa is a go-to location again and with Iamgold as its partner in Senegal, it is in good company. The "closeology" in Senegal is impressive with many household-name projects in near proximity. Meanwhile, the company is cutting its coat to suit its financial cloth with the evolution and exploration of its two targets in Cameroon.

 
 
Source: Oriole Resources PLC

Oriole will earn an initial 51% of both projects by funding US$1.56mln of exploration costs by June 2020

Oriole has the option to earn a 90% interest by spending US$3.12mln.

 

The projects were formerly held in JV with Reservoir Minerals (which merged with Nevsun in 2016). The majority of work to date has been completed at the Bibemi licence.

 

 

The Cameroon Option

 

 

Under the terms of the option agreement with Bureau d'Etudes et d'Investigations Géologico-minières, Géotechniques et Géophysiques SARL (BEIG3), Oriole will earn an initial 51% of both projects by funding US$1.56mln of exploration costs by June 2020. Thereafter, Oriole has the option to earn a further 39% for an additional U$1.56mln in exploration expenditure, or on the completion of a pre-feasibility study on at least one of the projects, over the subsequent two years.

 

 

BEIG3 will retain a 10% free-carried interest in both projects up to the completion of the second option or the completion of a pre-feasibility study on at least one of the projects. Thus far Oriole has met its first-year commitment of US$0.52mln on exploration work.

 

Surface exploration has focused on the central Bakassi area

The Bibemi Project

 

The Bibemi concession is sizeable at around 202 km2 .

 

 

Surface exploration has focused on the central Bakassi area of the licence where gold is predominantly hosted in a series of outcropping quartz veins.

 

 

Three parallel north-northeast-trending mineralised trends were identified on the licence by the former operator over a strike distance of around 20km. Historic best results from 7,744 trench samples included 8.5 metres (m) @4.04 grams per tonne (g/t) gold (Au) and 6.2m @ 8.05 g/t Au.

 

 

 
 
Source: Oriole Resources PLC

 

In July and August of last year, Oriole undertook a mapping and a rock-chip sampling programme on the Bakassi area. A total of 454 rock chips samples were taken from veins, and the host wall rock. Best results include 135.4 g/t Au, 119.7 g/t Au, 117.2 g/t Au and 107.2 g/t Au, with 16 samples returning >10 g/t Au and 43 samples assaying >1 g/t Au.

 

The results extended the previously defined northeast-trending Zone 1 gold anomaly to more than 4km in strike, as well as defining parallel zones of mineralisation (100-200m to the east) extending over 500m. Results also confirmed mineralisation in Zone 2, a parallel northeast-trending zone around 1km to the east, where results up to 35.9 g/t Au have extended the known mineralisation to over 1km.

 

 

Fourteen channel samples taken across individual quartz veins within the trenches have also confirmed the potential for higher-grade mineralisation

 

Recent Exploration at Bibemi

 

High Grades from Trenching

 

In the first quarter of 2019 (1Q19), Oriole's team completed the phase 1 trenching on 200m-spaced lines for a total of 8,742m (22 trenches). To date, results have been received for 3,608 samples from the first 13 trenches (BT-001 to BT-013) and have confirmed multiple zones of orogenic-type mineralisation, with best results of 6m @ 3.02 g/t Au (BT-010) and 1.4m @ 6.31 g/t Au and 1.2m @ 1.48 g/t Au (BT-005) (table 1). Mineralisation is associated with quartz and quartz-tourmaline veins hosted in amphibolite schist and granodiorite, commonly enveloped by wider zones of sericite-chlorite-epidote alteration. Results for the remainder of the phase 1 trenching programme are anticipated by early Q2-2019.

 

Fourteen channel samples taken across individual quartz veins within the trenches have also confirmed the potential for higher-grade mineralisation with best results of 13.70 g/t Au from the 25cm quartz-tourmaline vein and 9.55 g/t Au over 10cm from a quartz vein in trench BT-010.

 

 

On the basis of results received to date, a phase 2 infill trenching (100m spacing) has commenced across the most prospective areas, for a planned 4,360m.

 

 

The main anomalous structure follows the same orientation as at Bibemi

 

The Wapouzé Project

 

The Wapouzé concession consists of 180 km2 and is located 20 km north of Bibemi, and in a similar geological setting; the main gold anomaly is located in the east of the licence.

 

 

Reservoir Minerals conducted 1.5 km2 stream sediment sampling between 2011 and 2015. The main anomalous structure follows the same orientation as at Bibemi and additional zones showing signs of mineralisation have been identified for follow-up.

 

 

 
 
Source: Oriole Resources PLC

 

Recent Work at Wapouzé

 

Recent Focus on the Bataol and Bidzar Zones

 

In early March 2019, Oriole announced the completion of a 400m x 100m-spaced systematic soil sample at the project. The latest programme was focused on the eastern portion of the licence, where previous stream sediment sampling by Reservoir Minerals returned five anomalous samples greater than (>) 25 parts per billion (ppb) Au.

 

A total of 2,119 samples were collected, with six samples assaying greater than 100 ppb Au, with a best result of 531 ppb Au, while 34 samples returned >20ppb Au and 106 samples defined broader zones of lower grade (>10 ppb Au) anomalism.

 

The results have identified two main zones of mineralisation, associated with quartz veins

The results have identified two main zones of mineralisation, associated with quartz veins hosted within a northeast-trending package of sheared lithologies. These are the Bataol Zone (8km x 5km) in the northeast of the licence, which covers the previously identified 8km stream sediment anomaly, and the Bidzar Zone (2km x 4km) in the southeast of the licence.

At the Bataol Zone, multiple parallel >10 ppb Au anomalies have been defined. Higher grade zones (>60 ppb Au) exist within and independent of these anomalies, including two measuring 1km x 0.1km, which, in the company's view, could indicate a potential for higher-grade ore shoots.

 

A number of narrower (0.1km), less continuous anomalies have been identified further to the south in the Bidzar Zone, including one 0.4km-long anomaly >60 ppb Au. A second 0.8km anomaly (>10ppb Au) is supported by a 7.36 g/t Au rock-chip sample, taken from an outcropping quartz vein. The quartz vein is oriented west-northwest (WNW), with a relatively shallow dip (55 degrees) and could indicate a cross-cutting control on higher-grade mineralisation within the main northeast-trending shear zone. No other significant results (>0.2 g/t Au) were yielded from the rock-chip and lag sampling programme.

 

The project has "closeology" going for it with multiple major gold discoveries

An infill soil programme (to 200m x 100m) is now underway over three key anomalies at the Bataol Zone to tighten-up the anomalies ahead of a trenching decision.

Dalafin Project

The project, on which IAMGOLD has an earn-in, is located in south-eastern Senegal. The 472.5 sq km Dalafin licence is positioned in the centre of the Birimian-age Kédougou-Kenieba gold belt that extends from eastern Senegal into western Mali. As can be noted from the map below the project has "closeology" going for it with multiple major gold discoveries in the zone, including Barrick’s Massawa deposit (3.4 million oz Au) and Oromin Exploration’s Sabodala deposit (3 million oz Au) in Senegal, and Barrick’s Loulo (12 million oz Au) and Gounkoto projects (5.76 million oz Au) in Mali.

 

IAMGOLD itself has recently completed a feasibility study at its neighbouring Boto development project (2.49 million oz Au), where mine permitting is in progress.

 

 
 
Source: Oriole Resources PLC

Oriole currently owns 85% of Dalafin through its Senegal-registered joint-venture company Stratex EMC SA, formed in partnership with private local company Energy & Mining Corporation SA (EMC), which holds the remaining 15%.

 
 
 

Option agreement with IAMGOLD

In March 2018, Oriole signed an option earn-in agreement with a subsidiary of IAMGOLD, under which it can earn into 51% of the Dalafin project by spending US$4mln over four years and a further 19% (total 70%) by spending an additional US$4mln over a subsequent two years.

 

To date, four main geochemical targets, Faré, Baytilaye, Saroudia, and Madina Bafé, have been confirmed by drilling.

 

 
 
Source: Oriole Resources PLC

Trenching, mapping, and sampling at Madina Bafé has confirmed the presence of a 1.2 km by 30-45m northeast-striking mineralised zone

IAMGOLD’s initial programme is focused on the Madina Bafé prospect, which is located 12 km west-southwest of its 2.49mln oz Boto gold project on which it has recently completed a feasibility study.

 

Madina Bafe

 

Trenching, mapping, and sampling at Madina Bafé has confirmed the presence of a 1.2 km by 30-45m northeast-striking mineralised zone in the south-east of the prospect. Mineralisation is hosted by sheeted tourmaline-quartz veins and quartz-tourmaline breccias with best results including 4.0m @ 1.40 g/t Au (MBT-005), 6.0m @ 0.86 g/t Au incl. 1.0m @ 4.40 g/t Au (MBT-005), 1.2m @ 1.14 g/t Au (MTB-003) and 1.0m @ 1.77 g/t Au. Mineralisation remains open to the east. Reverse circulation and diamond drilling between trenches MBT-003 and MBT-004 have previously returned excellent intersections – including 9.6m @ 16.08 g/t Au (MBDD-002) – that are indicative of depth-continuity of the zone and of elevated gold content.

Results from a follow-up 2,260m reverse circulation and 507m diamond drilling programme have confirmed that the mineralisation continues at depth

In 2018, IAMGOLD completed a 2,428m air core (AC) drilling programme. Vertical holes were drilled to intersect the bedrock interface in order to assess the geochemical signature of the bedrock, help depict alteration corridors and mineralisation trends, and define targets for follow-up deeper drilling. Results have outlined a 1.5km broadly WNW-trending gold anomaly (>20ppb) in the south-east of the prospect at the contact between a granite/granodiorite unit and sediments, with best results including 2.48 g/t Au and 0.66 g/t Au. The gold anomalism is coincident with strong bismuth (>0.5ppm) and molybdenum (>3 ppm) anomalism that may reflect intersections with northeast trending structures.

 

A second, 400m north-south anomaly (>20ppb) has been defined c.600m to the north-northwest (NNW) of Oriole reverse circulation (RC) drill-hole MRC117, which returned 15m @ 6.10 g/t Au and correlates well with previous surface sampling. Based on the structural interpretation, this zone appears to mark the intersection of NE and east-west trending faults.

 

 

Results from a follow-up 2,260m reverse circulation and 507m diamond drilling programme have confirmed that the mineralisation continues at depth, delivering a best intersection of 8 m at 2.56 g/t Au.

 

Planned Near-Term Work at Dalafin

 

Upcoming work by IAMGOLD in Senegal

 

IAMGOLD will shortly commence its year 2 earn-in work. The US$1mln exploration programme will continue to focus on Madina Bafé and will include 5,000m regional AC drilling, to extend northwards the previous 2018 campaign, and 4,000m RC drilling to follow-up on best results from the previous campaign.

 

The AC programme will comprise 1,267 vertical holes, drilled on a 400m x 50m spacing.

 

 

A subsequent 4,000m RC programme is planned to follow up on key anomalous trends defined by this AC drilling. Eight holes will also be drilled to test an artisanal site in the northeast of the prospect that was identified during AC drill pad construction and returned 4.11 g/t Au, 1.2 g/t Au and 0.59 g/t Au from grab samples.

 

 

IAMGOLD will also step north to test the Saroudia prospect, located around 2km northwest of Madina Bafé. An initial 2,500m AC drilling programme will be completed for 654 holes on a 400m x 50m spacing to test the most prospective area as defined previously by Stratex back in 2013 and 2014. These new holes will test the bedrock geochemistry of the upper saprolite or mottled zone. Samples will be assayed for low-level gold and multi-elements. Subject to results of the AC drilling, a 1,600m RC programme is planned to follow-up on any trends identified.

 

 

First results from this work should be available in late Q2 or Q3 of 2019.

 

 

 

First results from this work should be available in late Q2 or Q3 of 2019

 

 

Cameroon - The Political Dynamics

 

Cameroon - a colonial legacy

 

Any assessment of Cameroon needs to be made in the light of history. Originally a German colony, it was taken on after the First World War by France and Britain and divided between them. A smaller densely populated area bordering Nigeria was under British rule and the vast bulk of the colony was under French rule. At independence, the two colonies were recombined in a quite unique decolonisation effort that has not been untroubled due to linguistic and cultural differences. Overlaid upon this is the large extent of the country, relative poor transport infrastructure and the country being divided between a multitude of ethnic groups and a religious dichotomy between Christians, animists and Muslims. Over 60% of the population is under the age of twenty-five.

 

Oriole has encountered no problems where they are operating in Francophone Cameroon in the far northeast up near the border of Chad

 

Balancing all these competing interests and complications inevitably has led to the rise of a "strongman leader" and his perpetuation in power; thus Paul Biya has served as Cameroon’s president for thirty-six years.

 

Since November 2016, protesters from the predominantly English-speaking northwest and southwest regions of the country have been campaigning for continued use of the English language in schools and courts. In September, separatists started a guerrilla war for the independence of the Anglophone region as the Federal Republic of Ambazonia.

 

 

The government responded with a military offensive, and the insurgency spread across the northwest and southwest regions. As of 2019, fighting between separatist guerrillas and government forces continues. The conflict indirectly led to an upsurge in Boko Haram activities, as the Cameroonian military largely withdrew from the north to focus on fighting the Ambazonian separatists.

 

 

That being said, Oriole has encountered no problems where they are operating in Francophone Cameroon in the far northeast up near the border of Chad.

 

Turkey is strategically positioned on the Tethyan Belt and enormously gifted geologically

 

Turkey - Some Background

 

Turkey has gone in the space of a decade from an exciting new frontier to problem child in the mining space. Oriole, in its former guise as Stratex, was a pioneer in exploration and development in Turkey. It has quite rightly taken a step back in recent years passing as many of its projects as it can to local partners, who are more adept at dealing with the “complications” of the local scene as the Erdogan regime goes through its frequent gyrations.

 

Turkey is strategically positioned on the Tethyan Belt and enormously gifted geologically, and Oriole is well-positioned to get back into the fray should the local situation clarify itself. As we have seen with the likes of Ecuador, lost cause situations can “turn on a dime” and become attractive jurisdictions in rather short order.

 

The company also has some projects still available for placement and it has a team in Turkey that it hires out to the developers of the properties

The Turkish Assets

Turkey - Currently Challenging

The Turkish portfolio is varied and broad and the result of the company's long focus on this geologically-rich country. Most assets are now parcelled out to parties carrying a mixture of success-based fees and net smelter royalties (NSRs) as the projects move through development. The company also has some projects still available for placement and it has a team in Turkey that it hires out to the developers of the properties. The main assets in the portfolio are:

 

Muratdere Project

 

• Porphyry copper/molybdenum/gold

• Owned and managed by Lodos (mining investment) a subsidiary of Pragma (investment bank)

• Owned <10% by Oriole. This will shortly convert to a 1.2% (post-Turkish tax) NSR royalty

 

 

 

 

 

 

 

Karaağac Project

 

 

 

 

 

 

 

• Thrust-related epithermal gold

• 37 RC and 30 diamond drill (DD) holes over the property

• Acquired by Anadolu Export in 2015 for success based payment and 1.5% NSR royalty

• Exploration and drilling managed by Oriole

 

Karacaören Project

 

• Porphyry gold

• 4 RC holes. Awaiting the finalisation of a business and working licence.

• Once the operating licence is obtained, a Turkish company is to acquire the project for a 1.5% NSR royalty and historical cost to Oriole

 

Doğanbey Project

 

• Porphyry gold and molybdenum

• 3 DD holes and 3 RC holes. Awaiting the finalisation of a business and working licence

• Once the operating licence has been obtained, a Turkish company is to acquire the project for a 1.5% NSR royalty and historical cost to Oriole

 

Hasançelebi Project

 

• High-sulphidation epithermal gold and iron oxide copper gold ore deposits

• 15 DD holes with a number of good intercepts

• Once the operating licence has been obtained, a Turkish company is to acquire the project for a 1.5% NSR royalty

 

Enez Project

 

• Mining licence with a 1% royalty over Bentonite has been transferred to a Turkish company

• All rights to gold discoveries within the licence area have been retained

 

Doğala Project

 

• High-sulphidation gold

• Two DD holes; Turkish company is to acquire the project for a 1.5% NSR royalty

 

 

 

 

 

 

Muratdagi Project

 

 

 

 

 

 

• Antimony

• The licence has been transferred to Turkish company for a 1.5% NSR royalty on antimony production

Oriole represents a hybrid of an explorer and investment/royalty company

Conclusion

 

An Extensive and Diversified Portfolio in Turkey

 

As we have noted, Oriole represents a hybrid of an explorer and investment/royalty company. The exploration is in Africa and the company has investments in, and NSR's on, long-held assets in Africa and Turkey.

 

As mining starts to get it momentum back the glaring lack of new development projects in the pipeline is becoming more obvious after such a long hiatus in exploration work, due to straitened financial circumstances for most players, both small and large. The Dalafin project, with IAMGOLD, leading the project, looks like it could become a meaningful asset for Oriole and possibly in not too long a time frame. The Cameroonian assets are more formative, but advancing nicely, now that the focus has turned back towards Africa. Behind all these are the potential "sleeper" revenue sources of the Turkish projects that others are advancing.

 

 

So Oriole in its revivified guise is firing on three cylinders and that should be enough to start giving its share price added momentum.

 

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities,...

In exchange for publishing services rendered by the Company on behalf of Oriole Resources PLC named herein, including the promotion by the Company of Oriole Resources PLC in...

FOR OUR FULL DISCLAIMER CLICK HERE
LEGAL NOTICE – IMPORTANT – PLEASE READ:

This document is published by Proactive Research and its contents have not been approved as a financial promotion by Proactive Investors Limited or any other FCA authorised person. This communication is made on the basis of the 'journalist exemption' provide for in Article 20 of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and having regard to the FCA rules, and in particular PERG 8.12.

Where the note contains a ‘buy, sell, hold’ recommend, Proactive Investors Limited is authorised to provide investment advice as defined by Article 53 of the RAO

FOR OUR FULL DISCLAIMER CLICK HERE

Oriole Resources prepares for more drilling at Bibemi gold project; expands...

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey joins Proactive's Stephen Gunnion with and update on the companhy's Bibemi orogenic gold project in Cameroon. The company is working in partnership with BCM International to expand and extend the mineral resource at the Bibemi site. Recent...

3 days, 2 hours ago