Update on Sale of Hasançelebi & Dogala Royalties

RNS Number : 6954V

Oriole Resources PLC

10 August 2020

 

Oriole Resources PLC

('Oriole' or 'the Company')

Update on Sale of Hasançelebi & Doğala Mining Royalties

Oriole Resources PLC (AIM: ORR), the AIM-quoted exploration company focused on West Africa, provides an update on the sale agreement (the 'Sale Agreement') signed 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 (Announcement dated 30 July 2020).

The Sale Agreement required Bati Toroslar to pay US$30,000 within seven days, with the balance contingent upon the commencement of mine construction at either Hasançelebi or Doğala. However, the Company today confirms that Bati Toroslar has failed to make the initial payment. As such, the Company has the right to cancel the Sale Agreement  and the Board is considering its position.

Oriole Resources CFO, Bob Smeeton, said: "As part of our asset realisation strategy, we received an offer from a third party that triggered Bati Toroslar's right of first refusal. Unfortunately, despite exercising this right, Bati Toroslar has failed to make payment under the terms of the Sale Agreement and the Board now has the right to cancel the sale. Cancellation of the Sale Agreement would also remove Bati Toroslar's right of first refusal on the royalties should the Company agree a new third party offer.  

"Given the substantial gold price rise since this deal was initially agreed with the third party, we are reviewing all available options . "

Further Details

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.

On 30 July 2020, Oriole announced that it had 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 was to receive the first tranche of US$30,000 in cash within seven days, with the second tranche of US$220,000 in cash due upon initiation of project construction activities at either Hasançelebi or Doğala.  

Bati Toroslar has unfortunately failed to meet the terms of the Sale Agreement and as such, the Board is currently considering its next steps. As a result of the delayed payment, the Company ultimately has the right to terminate the Sale Agreement and, in that event, Bati Toroslar would no longer have the right of first refusal against any future offer(s) the Company receives.

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 positive and if a positive development decision is made.

** 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: [phone]
Blytheweigh (IR/PR contact) Tim Blythe / Megan Ray / Rachael Brooks	Tel: [phone]
Grant Thornton UK LLP Samantha Harrison / Niall McDonald	Tel: [phone]
Shard Capital Partners LLP Damon Heath / Erik Woolgar / Isabella Pierre	Tel: [phone]

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.

 

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