Oriole Resources PLC (AIM:ORR) revealed a total financing package of £400,000, including a share placing of £340,000, to advance the AIM-quoted exploration company’s assets in Cameroon.
The funds will be used to identify drill targets at the Central Licence Package (CLP) project during the 2023 dry season. The proceeds will also be used to finance the submission of a technical study, required to support a two-year licence extension in the fourth quarter of 2022, and to progress towards a JORC-compliant exploration target at Oriole’s 90%-owned Bibemi gold project.
The company raised about £300,000 (before expenses) in a placing and £40,000 as subscriptions by some directors. About 188.89mln shares were placed in total at 0.18 pence per share, a 22% discount to the closing price yesterday.
In addition, the board intends to enter into a salary sacrifice scheme to ensure that the majority of the funds are spent on direct exploration.
“With the markets being extremely challenging currently, the board is committed to making sure that the company’s projects are progressed in a timely yet cost-appropriate manner, and with a minimal percentage of total spend on G&A [general and administrative expenses],” said chief financial officer Bob Smeeton.
“This is particularly relevant as we head into the rainy season and are busy closing down our drilling camp at Bibemi.”
Under the salary sacrifice plan, the board’s net salaries of about £60,000 will be sacrificed over a four-month period from June 2022.
The company plans to use this amount to subscribe for new shares at the end of each month or as soon as practically possible thereafter. The number of shares issued will be calculated based on the 30-day volume weighted average price at the end of each month. Based on the current share price, the expected number of shares to be issued would be about 28.0mln.
The directors will collectively hold 2.26% of the company immediately following the placing. This stake is expected to increase to at least 3.49%, subject to pricing, following the issue of the salary sacrifice shares.
Four main prospects have been identified to date at Bibemi with Bakassi Zone 1 being the most advanced.