Key points:
- Oriole Resources shares rallied 8.57% on the IMAGOLD partnership update.
- ORR acquired a 51% stake in the Senala Gold project after spending $4 million.
- Oriole shares look pretty attractive after falling 71.5% in 12 months. Are they a buy?
The Oriole Resources PLC (LON: ORR) share price rallied 8.57% after issuing an update that its joint venture partner IAMGOLD had met the conditions to exercise the first option in the agreement signed on 18 February 2018.
According to the agreement, IAMGOLD committed to spending $4 million in advancing the Senala gold project, at which point it would qualify to acquire a 51% stake in the project.
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IAMGOLD has notified Oriole Resources that it has spent $4 million on the project and has now qualified to acquire the 51% stake in Senala as outlined in the agreement.
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Oriole Resources is currently reviewing IAMGOLD’s expenditures on the project to determine if the threshold has been met. The proper documentation shall be prepared and signed, giving IAMGOLD its 51% stake in the project.
The company has an option of spending an additional $4 million to acquire an extra 19% stake in the Senala gold project, taking its total stake to 70%. Luckily, the firm has indicated that it intends to proceed with the second phase of the option agreement.
Therefore, IAMGOLD will be spending another $4 million on the Senala gold project over the next two years to meet the conditions for the additional 19% stake bringing its entire stake to 70%.
Tim Livesey, Oriole Resources’ CEO, commented: “IAMGOLD’s notification that it has reached the U$4 million expenditure threshold and is moving to a 51% position at Senala is reflective of the excellent results we have seen coming out of the Year 4 exploration programme at the project. We will be engaging with IAMGOLD to move through the process of formalising the new ownership arrangements and discussing the future exploration plans.”
Oriole Resources shares have fallen 71.5% over the past 12 months and are trading near a crucial support zone. However, the shares have risen 5.3% in 2022 and could be headed higher in future. Therefore, I would buy the shares at current prices given the low risk-reward setup.
*This is not investment advice. Always do your due diligence before making investment decisions.
Oriole resources share prices.
Oriole Resources share price rallied 8.57% to trade at 0.38p, rising from Friday’s closing price of 0.35p.