Oriole Resources (LSE:ORR) advanced 1.9pc on Thursday morning after announcing a significant rebate from HM Revenue & Customs (HMRC). The Africa-focused exploration company expects to receive around £500,000 from the UK tax office following the positive resolution of a VAT dispute last year.

In 2017, HMRC ruled that Oriole could not class the support of its overseas exploration operations as an economic activity for VAT purposes. As a result, it demanded that the business pay back all of the VAT it had reclaimed in the UK since 2011. This led to a provision of £557,000 in Oriole’s 2017 financial statements and a £593,000 payment to HMRC last June.

However, Oriole has since disputed the ruling, successfully leading HMRC to reverse its decision. It now expects a final agreement to result in repayment in the current quarter.

Chief financial officer Bob Smeeton called the outcome ‘excellent news’, adding: ‘It removes a significant area of uncertainty around our operations, and brings a substantial amount of cash back to us. It has been a long process to reach this agreement and a significant and costly distraction that we can now put behind us.’

Cameroon push

The company will put some of the additional funds towards progressing its activities in Cameroon.

Oriole entered a conditional option agreement with established Cameroonian outfit BEIG3 in June last year for its two early-stage gold exploration projects, Bibemi and Wapouzé. The assets cover the highly prospective Neoproterozoic Pan-African greenstone belts in the north-east of the country.

The two-part agreement gives Oriole the right to earn up to a 90pc interest in the projects and take over their management. For an initial 51pc stake, the firm must fund $1.56m of exploration over two years, with a minimum commitment of $560,000 in the first year. It can then earn up to a further 39pc in exchange for another $1.56m exploration payment.

The business quickly got to work at the fields following the deal, and in November results from its rock-chip sampling programme demonstrated bonanza gold grades at Bibemi. The work confirmed a significant gold anomalism extending over a c.4km strike, predominantly from quartz and quartz-tourmaline veins hosted within granodiorite. All-in-all, 16 samples returned more than 10g/t gold, and four returned more than 100g/t gold.

Meanwhile, a field team has been dispatched to Wapouzé to carry out a soil sampling programme. Following its strong initial results at the field, Oriole plans to carry out a drilling programme in Cameroon this year.

Broader portfolio

In Thursday’s update, Oriole said some of the funds would also be used to pursue other opportunities in Africa and Europe. The company has a broad portfolio of interests across both regions.

Its most advanced asset is its 85pc-owned Dalafin project in the Kédougou-Kéniéba inlier of eastern Senegal. Here, Canadian miner called IAMGOLD has the option to acquire a 51pc stake by spending $4m over four years, diluting Oriole to 41.65pc.  It can increase this by a further 19pc to 70pc through the investment of another $4m.

In October last year, IAMGOLD completed a 2,428m air core (AC) drilling programme carried out at a prospect on the Dalafin licence called Madina Bafé. This is located just 12km away from IAMGOLD’s Boto gold development project, where it recently delivered the results of a feasibility study.

The results confirmed the presence of a 1.5km gold mineralised trend in the southeast and a 400m gold anomaly in the northwest, both greater than 20 ppb. The drilling also produced higher-grade gold samples, with best results including 2.48g/t gold and 0.66g/t gold. According to Oriole, these grades could indicate the presence of a feeder zone at depth on the prospect.

IAMGOLD is now completing a 3,000m RC campaign at Madina Bafé in November, testing identified anomalies as well as strike extensions at some previous mineralised holes.  Following this, the company will carry out a 500m diamond drilling campaign to validate some of the best intersections offered by Oriole through previous drilling.

Elsewhere, Oriole owns positions in an extensive portfolio of early-stage exploration interests. It holds a 30pc stake in Thani Stratex Resources for its projects in Egypt and Djibouti and an 11.6pc holding in Tembo Gold for its project located next to Acacia Mining’s 20Moz Au Bulyanhulu mine. It also has a 7.8pc position in private Australian company Aforo Resources for projects in Burkina Faso. Finally, it owns stakes in several licences in Turkey including 14.9pc in copper-gold project Muratdere that is expected to default to a 1.2pc royalty position shortly.

Author: Daniel Flynn

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