Oriole Resources plc (LON:ORR) Executive Director of Exploration Claire Bay caught up with DirectorsTalk to discuss the updated Mbe Mineral Resource Estimate, the project’s expansion potential and the next exploration programme in Cameroon.
Q1: You’ve announced an updated JORC Mineral Resource Estimate that takes Mbe to 1.66 million ounces of contained gold. How significant is this milestone for Oriole Resources, and how does it change the way investors should view the project?
A1: It’s fair to say that we’re delighted with today’s announcement, which has uplifted the Mbe resource from 1.23 million ounces to 1.66 million ounces, as you say, based on a very modest amount of drilling. As we head closer to the two-million-ounce mark, it’s showing real potential to become a world-class deposit, albeit we do need to do more work to underpin that claim.
As it stands, though, we already have a substantial JORC Inferred Mineral Resource that, once we’ve upgraded to the Indicated category, should support an open-pit development of 100,000 ounces per year.
As a reminder, the total resource comprises two deposits that are located 700 metres apart, and we’ve drilled less than 12,300 metres on the property since we commenced our maiden drilling programme just 18 months ago. Both of these deposits are open-pittable from surface and are open in all directions and at depth, so we do expect the resources to increase with further step-out drilling.
Q2: The MB01-South resource has increased by almost 50%, following just 10 additional drill holes, as you say. What does that tell you about the scale and continuity of the mineralisation, and why are you increasingly confident that this could become a genuine multi-million-ounce gold project?
A2: So, the mineral resource at the South has been increased by 430,000 ounces, which is that 50% uplift based on those 10 holes. Those 10 holes were specifically focused on the immediate lateral extensions of the mineralisation we identified through the maiden programme. The system there has now been confirmed to extend over a 1.2-kilometre strike length, to a width of 730 metres and down to 290 metres.
In reality, we’ve still only scratched the surface, with both deposits remaining open in all directions and at depth, as I said, therefore offering expansion at those sites specifically. Also, we have multiple other targets within the wider licence yet to be drill-tested. Incidentally, these targets are within one to two kilometres of the two deposits.
So really, we’re looking at it as a single operation. They would be very much satellite targets that would support and underpin that multi-million-ounce target that we’re trying to achieve.
As our investors will know, Mbe is part of the wider district-scale licence package, or CLP area, as we refer to it and we have further anomalies within those licences as well. So, in fact, that area was highlighted by the World Bank-funded study a few years back as being the area most likely to hold significant gold deposits. So effectively, we’re just proving up that thesis.
Q3: As you mentioned earlier, despite the substantial resource increase, both Mbe South and North remain open in all directions. Where do you see the greatest opportunities to add further ounces? How much more exploration upside do you think remains across the wider licence area?
A: A bit of an open-ended question, I guess. During the last drilling campaign, we have seen support for extensions at Mbe South specifically, to the west, to the south and to the east, as well as the northwest. So, definitely, all of those directions are going to be considered for step-out drilling in the next programme, and I believe will deliver additional ounces.
As I’ve mentioned just now, we have a number of proximal satellite targets that we’d like to explore further through trenching and drilling in the first instance. Again, talking to the wider CLP, we expect that Mbe is not going to be in isolation. Where we have one large-scale deposit, there will be more, I’m sure of it.
We’re in a structural corridor with similar geology throughout the area, and the work that we’ve done to date has suggested this is the case. We reported earlier this year some initial results from work in those licences, and they’re starting to look very interesting.
So, we very much, as I said in my last interview, are starting to deliver on that district-scale potential for the area. It’s hugely exciting.
Q4: As you touched on just now, you and your partner, BCM, are now reviewing the next work programme. What can you tell me about the priorities from here?
A4: We’ve been waiting for this revision to the MB01-South resource to be able to plan the next programmes at both the Mbe deposits. We do have provisional programmes designed, but these are now being revisited in the context of that new resource model, specifically looking at the variogram analysis to see where are the best places to maximise our chances of success in delivering those additional resources.
So, we are revisiting those, revising them. We’ll be discussing them with our partner, BCM, over the coming weeks.
I would expect the programmes to include both extensional and infill drilling, as I mentioned the last time we spoke, plus further trenching over the other nearby targets where we’ve had soil and rock-chip sampling already, which is giving us a hint that there’s something for us to take a closer look at.
We’re also going to be focusing on doing some additional environmental work. We already have a weather station on site collecting some data to support baseline study works.
So, we’ll be kicking off that work in earnest during the next field season, ready for an eventual open-pit development, because this really looks like it’s shaping up to be a very nice open-pit operation or having potential for an open-pit operation.
Q5: Now, this announcement also takes Oriole Resources’ overall attributable gold resource to above one million ounces across the portfolio. How important is reaching that threshold strategically, both in terms of attracting investors and demonstrating the value that you’ve built across Cameroon and Senegal?
A5: I think investors are wary of claims by junior exploration companies when they use words like “million-ounce gold resource” or “world-class gold deposit” but we’ve tried to demonstrate the quality of our exploration through systematic exploration and delivery of results like we’ve achieved today.
Essentially, every ounce that we’re delivering increases the intrinsic value of our company.
We’ve got a small but dedicated team in Cameroon and the UK, and we closely watch our funds, making sure that as much capital as possible gets invested directly into our exploration activities. As I say, I hope that’s demonstrated by the results we’ve achieved to date.
Our market cap has increased over the last two years, largely helped, I guess, by the results we’re getting at Mbe, but also the gold price. Even at an £18 million market cap, we still think we’re grossly undervalued. Hopefully today’s announcement will give confidence to our current shareholders that we’re on the right track and will be an incentive to any new investors watching to come on board.
