The Oriole Resources PLC (LON: ORR) share price fell 7.63% after revealing the details of a salary sacrifice scheme agreed on by its directors. The company has offered compensation to its directors in the form of shares for the forfeited salaries.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The exploration company focused on the West African region revealed that its directors had agreed to forego a gross amount of £7,000 in cash salary in exchange for ordinary shares in the company, which the markets seem to disapprove of.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
Many were surprised to see Oriole Resources issue 2.725 million shares to the directors in exchange for the foregone salary, which seems like a raw deal on the surface. However, given that ORR shares are trading at a fraction of a penny, the massive amount of shares issued was necessary.
Furthermore, investors were concerned that the exploration company might have to issue more shares in the future, if its directors agreed to forfeit more of their cash salary in future. Therefore, issuing new shares to the directors in exchange for their salary may not be sustainable over the long term.
Oriole Resources expects the new shares to be admitted to trading on the London Stock Exchange’s AIM market on 9 January 2022.
The company announced on 21 December 2022 that its partner, IAMGOLD Corporation, was selling its operations in Mali, Senegal and Guinea to Managem Group for a total of US$282 million.
The sale will affect Oriole Reosurces’ Senala Gold project, in which IAMGOLD owns a 51% interest through a farm-in agreement. The project is located in Senegal and is very promising. The transaction is expected to close in Q3 2023.
Oriole Resources shares are trading above the lows hit in November, as shown on the chart below, but have pulled back from recent highs. Hopefully, the shares will keep trading above the November lows.
*This is not investment advice.
The Oriole Resources (ORR) share price.
The Oriole Resources share price was trading down 7.63% at 0.15p, from Tuesday’s closing price of 0.17p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.