West Africa-focused exploration firm Oriole Resources (LSE:ORR) rose 4.1pc on Thursday after revealing developments across its portfolio and highlighting its belief that is being undervalued heavily by the market.

Speaking at Oriole’s AGM, non-executive chairman John McGloin said the company’s partner IAMGOLD has now met its year one commitment at the Dalafin project in Senegal and has now begun its year two programme. This will involve 13,000m of drilling to extend its 2018 programme at a prospect called Madina Bafé northwards. The major will also step 2km northwest to test another candidate called Saroudia. Results from these programmes are anticipated late Q2 or Q3 this year.

IAMGOLD, with whom Oriole struck a deal on Dalafin last year, is focusing on these two prospects first because they are closest to its 2.49MMoz Boto gold project. Given that the sites are within trucking distance to Boto, the business hopes to use them as feed for its planned mine.

In Thursday’s update, McGloin said Oriole believes that IAMGOLD will extend its exploration programmes to test other targets within Dalafin including one called Faré. With this in mind, McGloin said Dalafin alone ‘more than underpins’ the £2.49m organisation’s current share price and provides a ‘stark example of how undervalued [Oriole] is in the current market.

Elsewhere, McGloin said systematic exploration has continued at its Bibemi and Wapouzé projects in Cameroon. Phase two infill programmes are nearing completion, with further results expected later this quarter. McGloin added that Oriole sees Cameroon as a ‘key growth centre’ moving forward and plans to expand its footprint in the country during 2019. This expansion will include additional licences under its existing JV – established last year – and new licence applications under a subsidiary business.

Cameroon is a 'new frontier' with respect to modern gold exploration, offering huge potential in what is a geologically highly-prospective terrane,’ said McGloin. ‘We anticipate that companies will continue to follow our lead and expect the pace of investment in exploration to increase once results from the first phase of the World Bank-funded 'PRECASEM' geological targeting programme - led by the French and Finnish geological surveys - are released later this year. The Cameroonian government is highly supportive of foreign investment into the mining sector, having revised its mining code in 2016, and we are pleased to be leading the way.’

Finally, McGloin said Oriole’s cash balance stood at £1m as at the end of April, having been boosted by a £522,000 tax refund from HMRC and £40,000 worth of R&D tax relief. He added that the company’s cash has been bolstered further in May by value realisation across its various investments and royalties.

‘In Turkey, this has included offsetting our costs by sub-contracting our geological team to local partners, as well as the receipt of staged payments relating to a US$500,000 success-based fee at the Karaağac gold project,’ said McGloin. ‘As we enter the rainy reason in Cameroon, our operational spend will be significantly reduced, and we continue to monitor our positions across our investment and royalty portfolio and to review monetisation opportunities.’

Author: Daniel Flynn

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