Aim-listed Oriole Resources has signed two nonbinding heads of terms (HoT) with Ghana-based contractor BCM International to fast-track development of the Bibemi and Mbe gold projects, in Cameroon.

The Bibemi HoT will lead to an earn-in agreement, whereby BCM will be able to earn up to a 50% interest in Bibemi in return for a $500 000 cash payment and $4-million in exploration expenditure.

A large part of the exploration work will comprise resource expansion drilling, which is slated to start in the first quarter next year.

Further success-based payments from BCM to Oriole will be due, depending on the level of resource ounces reported.

Oriole currently owns 92.2% of the Bibemi project.

Meanwhile, Oriole continues to progress various technical studies to support the application for an exploitation licence in 2024.

Beyond these commitments, any further expenditure at Bibemi will be on a contribute or dilute basis.

In the event that Oriole’s percentage holding in Bibemi falls below 5%, then its interest will convert to a 3% net smelter return (NSR) royalty on future production at the project.

Oriole will continue to manage the technical programmes on the project and provide its geological and administrative teams to BCM, under a separate contract.

Following signature of the HoT, Oriole has received a non-refundable payment of $50 000 as an advance payment, which shall be set off against the signature payment.

The earn-in agreement is being drafted and is expected to be executed before the end of this year, subject to the satisfaction of certain conditions precedent.

“We are pleased that the value proposition has been recognised and we look forward to working with BCM to enlarge and upgrade the maiden resource at Bakassi Zone 1, as well as identifying additional resources within the wider Bibemi licence,” Oriole CEO Tim Livesey states.

He adds that BCM brings decades of experience in the West African mining scene and has a highly competent management team and skilled workforce, with extensive experience in mine construction and operations support.

“In addition to the upfront cash component, the structure of the deal sees a significant inflow of direct investment into resource development which will help fast-track our pathway to development.

“While Oriole will be the operators of the early works, BCM will supply equipment and drilling capacity, with both parties working on an open book system as true partners in the venture,” Livesey explains.

Success-based payments on resource addition have also been included in the deal, to ensure exposure to the exploration upside at the project and to give Oriole the potential for additional cash payments as the joint venture progresses.

“We have always believed that Bibemi has the capacity to become a model for gold mine development in Cameroon and the addition of funding and project development capabilities from our new partners will help us move towards that goal,” Livesey states.

SECOND AGREEMENT

The Mbe HoT will lead to an earn-in agreement in terms of which BCM will acquire up to a 50% interest in the licence in return for a $1-million cash payment and $4-million in exploration expenditure focused on defining resources at the project.

Again, further success-based payments from BCM to Oriole will be due depending on the number of resources defined.

BCM also aims to start drilling on this project during the first quarter of next year.

In the event that Oriole’s percentage holding in the licence falls below 5%, then its interest will convert to a 3% NSR royalty on future production from Mbe.