Oriole Resources (AIM:ORR), the AIM-listed gold exploration company focused on Central and West Africa, has signed a joint venture agreement with AGEM Senegal Exploration Suarl, a wholly owned subsidiary of Moroccan mining group Managem, over the Senala orogenic gold project in eastern Senegal.
The agreement replaces a former option arrangement under which AGEM spent US$5.8 million to earn approximately 59% of the project; a further US$212,000 working capital injection from AGEM takes its stake to 60%.
The Senala licence will transfer into a newly formed joint venture company, in which Oriole's 85%-owned subsidiary Stratex-EMC will hold 40%, giving Oriole an effective 34% interest in Senala.
Oriole does not intend to fund its share of the upcoming work programme, meaning its stake will dilute in line with actual expenditure; should its interest fall below 10%, it converts automatically to a 2% net smelter return royalty.
The US$2 million programme, set to commence in August, comprises 3,000 metres of diamond drilling at the main Faré prospect and 10,000 metres of auger drilling at the Baytilaye and Konkonou targets.
The project sits within the Kédougou-Kéniéba Inlier, 15 kilometres from Managem's operating Boto gold mine, which carries a 1.8 million-ounce reserve.
"The completion of the joint venture agreement with our partner Managem is a major milestone for the Senala project," said chief executive Martin Rosser, citing the proximity to multi-million-ounce discoveries in the district.
