Oriole Resources PLC

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

Interim Results for the six-month period ended 30 June 2022

Oriole Resources (AIM:ORR), the AIM-quoted exploration company focussed on West Africa, announces its unaudited Interim Results for the six-month period ended 30 June 2022 (the 'Period').

Operational Highlights:

·    Bibemi gold project ('Bibemi'), Cameroon - completion of a fourth phase of diamond drilling has delivered best results of 14.8 metres ('m') at 4.26 grammes per tonne ('g/t') gold ('Au') and moved the Company towards a JORC Exploration Target definition at the promising Bakassi Zone 1 prospect;

·    Central Licence Package ('CLP'), Cameroon - completion of semi-regional soil sampling over the five eastern licences ('Eastern CLP') has yielded results of up to 838 parts per billion ('ppb') Au and identified extensive zones of gold anomalism, including a c.12.5 kilometre ('km') zone at the Mbe target;

·    Senala gold project ('Senala'), Senegal - IAMGOLD's completion of an initial US$4 million exploration expenditure to earn an initial 51% interest ('First Option'), and commencement of the second US$4 million expenditure to earn an additional 19% interest ('Second Option').

Financial Highlights:

·    The Group's pre-tax loss for the six months to 30 June 2022 was £0.39 million (2021: loss of £0.87 million);

·    Administrative expenses increased to £0.58 million (2021: £0.52 million) as the Company established full-time offices in Cameroon in order to increase its in-country presence and improve its operational efficiency;

·    Exploration expenditure of £0.66 million in Cameroon, mainly related to three phases of diamond drilling at Bibemi and the completion of soil sampling programmes over the Eastern CLP licences;

·    The cash balance of the Group as at 30 June 2022 was £0.43 million, ahead of a subsequent top-up equity raise of £0.34 million.

Tim Livesey, CEO of Oriole, said: "The first half of 2022 has been characterised by global economic uncertainty in light of the war in Ukraine, which has resulted in a difficult time for the share price performance of junior companies across the sector. Nevertheless, we were able to execute our H1-2022 exploration plans in Cameroon as planned and we are extremely pleased with the excellent exploration progress being made.

"The diamond drilling campaigns at Bibemi have been a great success, with the majority of holes intersecting orogenic-type gold mineralisation and providing depth continuity to the multiple targets identified within the 12km-long surface expression. The most recent results have confirmed the importance of sub-horizontal (extensional) veins in terms of their potential for significantly increasing the grade and width of the mineralised intervals. Our widest intersection to date of 14.80m grading 4.26 g/t Au is attributed to the interaction between these veins and the sub-vertical veins, confirming our geological model at the Bakassi Zone 1 prospect.

"Work on our CLP project has progressed to soil sampling over the five eastern licences, and results from this programme has delivered a number of highly significant gold anomalies, including a 12.5km-long zone at the Mbe target, confirming the early potential in this area.

"We have also advanced the development of our exploration with mapping and ground-based geophysics, and results from these programmes have enabled us to improve our targeting and will ensure we are maximising the chance of success across all of our assets in Cameroon.  

"In Senegal, we continue to be free-carried for all exploration at Senala, where IAMGOLD has reached the end of its First Option period and has elected to continue investment into the Second Option period.  This will see a further spend of US$4 million before 28 February 2024 for IAMGOLD, at its election, to reach a final equity position of 70%. During the Period, IAMGOLD has continued to explore the Faré prospect, where the Company has already defined a maiden JORC-calculated Mineral Resource Estimate that is open along strike and at depth. The most recent auger drilling programme has targeted the possible extensions to the currently-defined system, including towards the easternmost licence boundary, and results are awaited."

Interim Management Report

The first six months of 2022 comprise the second half of the 2021/22 exploration field season in Cameroon, as the rainy season covers the period July to September. The work so far in 2022 has seen the completion of a further diamond drilling programme at Bibemi, as well as early-stage exploration over the Eastern CLP licences in central Cameroon. In Senegal, IAMGOLD completed its First Option expenditure commitments at Senala and embarked on its exploration programmes under the Second Option period.

Bibemi

At Bibemi, a geophysics campaign was conducted at the beginning of the year that enabled the completion of a further 531m of targeted drilling at the Bakassi Zone 1 prospect, to test the theory that sub-vertical vein sets could add significantly to the mineralised volume. The results from this drilling (announcement dated 15 September 2022) confirmed the importance of these cross-cutting structures, delivering enhanced intersection widths and grades compared to earlier phases. Best results included 4.26 g/t Au over 14.80m, 2.74 g/t Au over 7.70m and 12.30 g/t Au over 3m, significantly expanding the potential of Bakassi Zone 1 to deliver a future mineable resource estimate. The results of this work will allow us to update our geological model for Bibemi and formulate the next steps for the project. A two-year extension to the licence is currently under application and a positive outcome is anticipated in Q4 of this year.

Central Licence Package (CLP)

Work on the CLP has continued throughout the Period with exploration to date focused on the five Eastern CLP licences. The confirmation of significant gold in-soil anomalism over a pilot soil sampling grid (announcement dated 14 March 2022), led to a continuation of the programme over a further five sampling grids (announcement dated 17 August 2022). Across the Eastern CLP licences, we have already identified a significant 12.5km gold-in-soil anomaly, as well as multiple other areas that merit further follow-up work. On the basis of the results received to date, an application has also been made for a further 487 km² licence, Maboum, immediately east and adjacent to the existing Eastern CLP licence package. Once granted, the licence will require a similar early-stage exploration programme to enable target definition.

Follow-up programmes on the Eastern CLP licences will include detailed mapping, an extensive geophysical survey and infill soil sampling, with the aim of identifying initial reverse circulation ('RC') drill targets by Q3 2023. The three Western CLP licences are so far unexplored, after some access issues that are being resolved at Ministerial level.

Having only been granted the licences in early 2021, this rapid progression of previously unexplored, prospective ground in Cameroon has been conducted professionally and economically, further de-risking the licences and supporting the Board's proposal that the CLP offers the opportunity for the discovery of a brand-new gold district.

The multi-element assay data collected through the programmes has also identified some potentially interesting concentrations of other minerals and further information will be provided on this in due course.

Senala

In Senegal, IAMGOLD confirmed it had met its first US$4 million commitment to earn into an initial 51% interest in the 472.5 km² Senala Licence (announcement dated 21 February 2022). Following confirmation of that expenditure, a process is currently underway to formalise IAMGOLD's 51% ownership position. It was also pleasing to see that IAMGOLD continued with its exploration plans at Senala with an extensive c.10,000m auger programme to further understand the wider surface footprint of the Faré anomalism. With excellent drill results already received over a 6km strike length, and a 280,000 oz Au JORC Exploration Target (open along strike and at depth) already identified over 950m of that strike length (announcement dated 23 August 2021), the Board believes that the system at Faré has significant potential for the delivery of a substantial open-pit mining target. It is hoped that the auger programme will identify further targets proximal to the existing system footprint that could further enhance the potential at Faré or provide satellite targets. Results of the auger programme are anticipated shortly.

Senala sits within the heart of the Kédougou-Kéniéba inlier, host to an exciting, multi-million ounce gold district that covers the border region between Senegal and Mali. It is the focus for many mid-tier and major gold companies, including IAMGOLD which continues to invest in its 2.5 million-ounce Boto gold project that is adjacent to Senala. With the region being a hotspot for M&A activity (most recently with the sale of Oklo Resources to B2Gold, for A$90 million) the Board remains convinced that the Company's holding in Senala represents a significant driver of value for shareholders.

Legacy Assets

During the Period, progress has continued towards unlocking value from the Company's legacy assets. At the Muratdere copper-gold porphyry project ('Muratdere') in Turkey, in which the Company has a 1.2% royalty interest, successful approval of the project's Environmental Impact Assessment ('EIA') is anticipated shortly and will be a major step forward in the project's progress. The project has an initial mine plan (covering only 16 million tonnes of a total 51 million tonne resource) to deliver 68,000 tonnes of copper, which at today's prices would give gross metal revenues in excess of US$700 million. An update on this key phase will be provided in due course. The wider portfolio of receivables in Turkey totals approximately US$1.7 million and, although progress to date has been slower than anticipated, their collection is anticipated over the next year.

In East Africa, the Company continues to monitor its investments in Djibouti and Egypt. In Djibouti the drilling programmes have been delayed due to ongoing licence renewal discussions with the Ministry of Mines but Thani Stratex Djibouti ('TSD') remains confident of successful renewal. The Company currently has a 9.21% interest in TSD's assets. In Egypt, Red Sea Resources Limited ('RSR') has continued its earn-in to Thani Stratex Resources' ('TSR') Hodine licence (announcement dated 16 March 2021) and it has met its initial US$1.2 million expenditure. The Company currently holds a 24.92% in TSR and looks forward to RSR's further progression of these licences in 2022.

Finally, the Company also continues to monitor its 0.68% holding in Elephant Oil Limited, which relates to a fully written off holding in Rift Resources Limited. Elephant Oil Limited, an oil company that holds a c.4,600 km² onshore exploration licence in Benin is currently working towards a listing on NASDAQ. At what is a time of significant global stock market uncertainty, this process is taking longer than anticipated. Whilst the Board remains confident in an eventual successful listing, there has not been a revaluation of the investment balance in these financial statements, although the potential remains for the holding to be revalued and for the asset to become liquid.

Results

The Group has posted an operating loss for the Period of £0.39 million (2021: loss of £0.72 million). A significant component of this reduced loss is the unrealised exchange movement on the Senala asset, which is denominated in Euros. A gain of £0.17 million in 2022 compares to a loss of £0.23 million in the comparative period, to give a favourable foreign exchange swing of £0.40 million, which accounts for most of the reduction in operating loss. At the administrative expenses level, costs increased from £0.52 million to £0.58 million, reflecting the recruitment of a local team in Cameroon. With 10 existing licences, more under application and continued successful exploration, the Company is fully established and operational in Cameroon throughout the year, having addressed the need to have a dedicated and visible team on the ground, liaising regularly with all stakeholders including officials in the key government departments.

The receipt of another research and development tax credit during the Period, this time for £0.40 million, reflected the higher level of exploration work undertaken in 2021. The Board is monitoring proposed changes to the research and development tax credit scheme and is hopeful that the Group's activities will continue to be supported. Current guidance confirms the scheme will continue to be open in its current format for at least the current financial year. As a result of this tax credit, the Group reports a profit after tax of £0.01 million (2021: loss of £0.83 million).

At 30 June, the Company had £0.43 million in cash and, a few weeks later, completed a top-up equity raise of £0.34 million. Earlier in the Period, a €166k bank guarantee was issued to the Customs department in Cameroon to cover the potential import duties on the diamond drill rig being used at Bibemi, payable should that equipment be retained in Cameroon permanently. A process is currently underway to re-export that rig, on the basis that the next programmes would be for reverse circulation drilling, and as a consequence the guarantee should be cleared shortly.

Additionally, over the Period, and since the Period-end, the directors have continued to invest and increase their own personal equity in the Company via a salary sacrifice scheme, as well as through the aforementioned capital raise and on-market buying when permitted.  

At Senala, the Company will be free-carried until February 2024 should IAMGOLD, at its election, advance its Second Option to earn a 70% interest. Results from the recently-completed auger drilling programme are awaited and the Company looks forward to the next phase of work at the project.

In Cameroon, the Company's operational strategy remains heavily focussed on delivering quality, capital-efficient exploration to identify resources with economic potential. The next phases of work are currently being planned and it is clear that significant progress can be made across the portfolio, with relatively low, cost-controlled budgets. The early-stage work programmes in the CLP are, by default, relatively inexpensive and will be focussed towards identifying drill targets in late 2023. In order to deliver meaningful and cost-efficient results at the CLP, the timing of drilling is critical and so, over the next year, the team will focus strongly on de-risking the anomalies identified to date in order to rank and prioritise them effectively ahead of that targeting.

As noted above, the recent work at Bibemi has demonstrated the potential for mineable widths of mineralisation at the project and delivery of a maiden JORC Exploration Target is anticipated in Q4 2022. This is extremely exciting given that the project, and indeed country, is completely virgin territory with respect to hard rock gold resource definition.

The results received from the latest drilling and sampling programmes in Cameroon continue to endorse the Company's belief that Cameroon has an enormous, untapped potential to host significant endowments of gold and other commodities. The team looks forward to building on these results and developing the next phases of exploration that will bring the Company closer to defining an economic resource in Cameroon.

Eileen Carr

Non-Executive Chair

On behalf of the Board

27 September 2022