OreCorp Limited
Annual Report 2021

Plain-text annual report

Annual Report and Accounts for the year ended 31 December 2021 AIM: ORR QUALITY EXPLORATION IN HIGHLY ENDOWED GOLD DISTRICTS O R I O L E R E S O U R C E S P L C A N N U A L R E P O R T F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 2 1 Welcome to our 2021 Annual Report Investment Case QUALITY EXPLORATION Developing a portfolio of highly prospective projects. Advancing projects along the value chain through quick and systematic exploration. DEVELOPING OPPORTUNITIES Our diversified portfolio offers several alternate paths to near and longer-term success. Multiple routes to a re-rate, multiple routes to a liquidity event. OPERATING RESPONSIBLY Ethical and responsible stakeholder engagement is at the core of everything we do. We ensure that all parties benefit from our operations. EXPERIENCED TEAM Led by a Board and management team with a wealth of experience. See our website for further information and news: www.orioleresources.com WWW.ORIOLERESOURCES.COM HIGHLIGHTS Operational Highlights: ° Three phases of diamond drilling completed at the Bibemi project in Cameroon for a total 6,154.10 metres (‘m’); ° Commencement of exploration at the 3,592km2 Central Licence Package project in Cameroon, following the award of eight contiguous licences in Q1-2021; ° At the Senala project in Senegal, IAMGOLD Corporation Contents ABOUT ORIOLE RESOURCES PLC Highlights Directors Our Strategy & Business Model Projects and Investments Chairman’s Statement STRATEGIC REPORT (‘IAMGOLD’) completed 689.50 m diamond drilling at the Operational & Financial Review Faré South target and a total of 7,002 m reverse circulation (‘RC’) drilling over the Faré Far South and Faré North targets. The results enabled the delivery of a Maiden Our Governance Section 172(1) Statement Resource Estimate of 155,000 oz gold (‘Au’) grading 1.26 Environmental, Social and Governance (ESG) grammes per tonne (‘g/t’) Au in the Inferred category at Faré South and has indicated a high probability for further resource definition at the other two targets. Corporate Governance Report of the Remuneration Committee ° Subsequent to the year end, IAMGOLD confirmed that it had met the expenditure requirements to exercise its option to acquire an initial 51% interest in Senala. Directors’ report FINANCIAL STATEMENTS Financial Overview: ° Incoming funds totalling £2.43 million have allowed for £1.78 million of direct exploration expenditure in Cameroon, as the Group advanced its projects; ° Operating loss of £1.44 million for the year to 31 December Independent Auditor’s Report to the members of Oriole Resources PLC Statement of consolidated comprehensive income Statement of consolidated financial position Statement of consolidated changes in equity 2021 (2020: £0.34 million), which includes an adverse £0.89 Statement of consolidated cash flow million swing in unrealised foreign exchange movements; ° Administrative expenses increased to £1.08 million (2020: £1.02 million) following the unwinding of cost saving Statement of Company financial position Statement of Company changes in equity measures introduced in 2020 in response to Covid-19. Statement of Company cash flows Read more in the Operating and Financial Review on pages 18 to 21 Notes to the financial statements Notice of Annual General Meeting Advisors & Offices Glossary 01 01 03 04 08 15 18 22 24 25 28 34 38 40 45 46 47 48 49 50 51 52 76 79 80 ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021ABOUT ORIOLE RESOURCES PLC02 HIGHLIGHTS CONTINUED Tim Livesey, CEO of Oriole, commented: “2021 has proven to be a bounce- back year for Oriole, with the award of the new licence package in central Cameroon, follow-on exploration drilling programmes at Bibemi, in the north of the country, and the successful completion of a maiden Mineral Resource Estimate at Senala, in Senegal, where our JV partner, IAMGOLD has also continued to advance exploration. Our team has delivered across all projects with a 100% success rate: • We have identified gold anomalism along an extensive trend (in excess of 35km in our new frontier at the Central Licence Package (‘CLP’) project in Cameroon; • We have drill confirmation of mineralised gold systems on the Bibemi licence, with diamond drill intercepts confirming a vertical and lateral continuation of the gold anomalism we previously identified at surface; • We have completed a maiden Mineral Resource Estimate for the central ‘Faré South’ target on the Senala licence, with IAMGOLD continuing to extend the known mineralisation at Faré South and Faré North, and intersecting new, wide zones of high- grade mineralisation at Faré Far South. All of this has been completed with a marginal increase in G&A spend, reflecting the unwinding of certain cost- saving measures implemented as a response to the pandemic in 2020. Most importantly, the programmes have all advanced quickly and efficiently, with a high percentage of the Group’s spend being on direct exploration, allowing us to “succeed or fail fast”. In this way we ensure our investors’ money is spent efficiently, in a targeted way and on those projects that best merit further focus and development. Progress has been made on our legacy assets and investments, with the ongoing advancement toward royalty stage at our Turkish assets, continued exploration on the Djibouti exploration assets and with a new private company investing into TSR’s assets in Egypt. 2021 has been a year of steady and successful progress across all fronts and we are excited to be entering 2022 in such a strong position.” Who we are Oriole Resources PLC is an exploration and development company focusing primarily on gold and high-value base metals. The Company is incorporated and domiciled in the UK. The Company’s shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange (company number: 05601091). WWW.ORIOLERESOURCES.COM DIRECTORS 03 Eileen Carr Non-Executive Chairman (appointed 17 February 2022) Tim Livesey Chief Executive Officer Eileen is a Chartered Certified Accountant with over 30 years Tim has over three decades of experience in gold and base of experience within the resources sector, having worked metals, with a distinct focus on Africa, Europe and Asia. He worldwide on a host of large-scale mining operations. She has worked at all stages of exploration, development and was appointed Finance Director of Cluff Resources Limited mining, and has a strong track record of delivery, both at the in 1993 and has, since that time, held several executive technical and commercial level within previous positions. directorships in the resources sector, including CFO for Monterrico Metals plc, the AIM-quoted copper exploration company developing the Rio Blanco project in Peru. Her first Non-Executive role was for Banro Corporation in 1998 and, more recently, Eileen held a Non-Executive Director position for AIM-quoted Bacanora Lithium plc. Some of his more notable roles to date include exploration manager (Eurasia), Barrick Gold Corp., project director and later CEO of Tethyan Copper Company Pty Ltd (a Joint Venture between Antofagasta Minerals and Barrick Gold Corp, owner of the Reko Diq project in Pakistan), and more recently as COO of TSX.V-listed Reservoir Minerals Inc., which Eileen has been a Non-Executive Director to AIM-quoted was sold in June 2016 to TSX-listed Nevsun Resources Ltd for Sylvania Platinum Limited since May 2015. US$365 million. Tim joined the company in March 2018. Bob Smeeton Chief Financial Officer Claire Bay Executive Director for Exploration & Business Development Bob is a member of the Institute of Chartered Accountants A Chartered geologist with over 14 years’ experience in the in England and Wales. He trained as a chartered accountant resources sector. Claire graduated from the University of with Price Waterhouse, qualifying in 1992, and has a BSc in geography from Durham University. Bob has extensive experience of working for AIM-quoted companies, where he has been heavily involved in turnaround situations, fund raisings and acquisitions. Southampton with a First Class Masters in 2007 and joined AIM-listed Stratex International shortly thereafter, where she spent the next 11 years. During her career, Claire has operated at both the technical and commercial level, with a particular focus on gold exploration in Africa and Turkey. In partnership with three different CEO’s, Bob was instrumental in the turnaround and subsequent growth of AIM-listed Universe Group Plc as Group Finance Director, seeing its market capitalisation increase from £1.5m to £25m during his tenure. Prior to Universe Group, Bob was European Finance Director for OpSec Security Limited, where he was heavily involved in formulating and implementing a very successful reconstruction plan. The restructuring plan stemmed the annual operating losses of £2.5million and moved the Company to a profit situation in the first year of its implementation. Claire was promoted to VP in July 2018 as part of the restructuring of the Company to Oriole Resources PLC and then to Executive Director in July 2021. Claire oversees the Group’s exploration programmes and is heavily involved in the review and interpretation of technical data, as well as co- managing the Company’s corporate development activities. David Pelham Non-Executive Director David Pelham is a mineral geologist with over 35 years global exploration experience. He has overseen the discovery and early evaluation of multiple deposits, most notably including the 6 Moz Chirano Gold Mine in Ghana, as well as Hummingbird’s 4.2 Moz Dugbe gold deposit in Liberia. David has been a non-executive director to AIM-quoted Cora Gold Ltd since May 2017. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021ABOUT ORIOLE RESOURCES PLC04 OUR BUSINESS MODEL & STRATEGY The Company operates a project generator model but remains agile with respect to the development pathway of each project in order to maximise value-add for the benefit of its shareholders. This strategy of identifying and developing a highly-prospective portfolio of gold and base metal assets, a number of which are in emerging economies, is designed to allow for the excellent returns that are possible on quality exploration projects whilst minimising the inherent risks that exist in a single project. Lifecycle of a single project The greatest opportunity for adding value to a project is illustrated by the Lassonde Curve, which follows the relative value of project ownership interests from early stage to mine production: Exploration Evaluation Construction Production Opportunity for greatest increase in asset value Probable/Proven Reserve e u l a V g n i s a e r c n I Measured Indicated R e s o u r c e Inferred Feasibility Study 3. Central Licence Package 2. 1. Bipemi and Wapouzé Senala (free carry) Discovery Commissioning The Lassonde Curve measures the lifecycle of a single ° Early-stage exploration is inherently risky; an economic successful project and the returns available to early-stage deposit either exists in an area, or it doesn’t. Exploration investors are potentially many multiples of their initial expertise can reduce this risk, and commencing investments. Typically, there are two value maximisation exploration with low-cost methods before moving to points; completion of the evaluation phase and completion higher cost methods is a key risk-reduction strategy; of mine building. Early-stage projects have the following key risks and characteristics: WWW.ORIOLERESOURCES.COM ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021 05 The project development cycle Phases of Work Evaluate > Plan > Raise > Work I A B O U T O R O L E R E S O U R C E S P L C Value - add o s t C e v r u e c d n Lasso Phases of Work Resource definition phase Phases of Work Phases of Work Phases of Work ° The project development cycle, including data evaluation, ° At this stage of the discovery and development curve, planning the next phase of work, completing a fundraise, operating costs are at a minimum and the impact of executing the planned work programme to gather more de-risking assets maximises return on investment. data and repeating these steps, is well understood in the industry. Projects move into the ‘Evaluation’ phase by raising the appropriate amount of capital at each stage. In essence, the increased capital intake during the project lifecycle is delivering enhanced asset value that will start to crystallise from the resource definition phase onwards; Oriole concentrates on the ‘Exploration’ and ‘Evaluation’ stages of this model, aiming to generate the most value for its shareholders by quickly progressing targets to discovery and then pushing these projects towards resource development and technical studies, which have been proven to drive an uplift in shareholder value during the Evaluation phase. ° The potential reward for early-stage investors is higher multiples of their initial investment, reflecting the higher investment risk inherent in early-stage projects; 06 OUR BUSINESS MODEL & STRATEGY CONTINUED The project generator model The advantage of a project generator model over the traditional ‘single project’ model is to spread the traditional exploration risks across multiple projects and jurisdictions. The ultimate goal may be to take any one project to a mine; however, it is more likely that value is delivered through the project evaluation phase and that acquirers or joint-venture partners are brought in to move the project towards mine construction. Ultimately, this offers the project generator the future potential to own minority percentages in a number of operational mines, rather than having majority exposure to only one project that could either succeed or fail. Junior Explorer Hybrid Project Generator Projects Discovery goal 1-2 1 Primary Funding Equity Equity Equity 4-6 2-3 Equity Equity Partners Multiple 20+ Multiple Equity Partners Royalties Typical Discovery Scenario 100% of a single discovery c50% at feasibility study, with options to contribute, dilute or sell Minority stake in a number of discoveries, portfolio of royalties Risk profile: Geological risk High Geopolitical risk High Value created in a single successful project Maximum Medium High High Low Low Low Success in the project generator model can lead to a number The project generator model seeks to reduce the binary of possible outcomes for each project, including: risk of being a single project Company by offering multiple ° Outright sale of all interests for cash and/or shares; ° Maintenance of a minority position all the way to mine construction and production; ° Choosing to dilute down to a residual royalty position (often in return for project capital and a free-carried interest); ° Retaining a majority position and developing a suitable project all the way to mine operation. opportunities for success. It also reduces the geopolitical risk which is an inherent issue for many exploration jurisdictions. At all stages, the aim is to understand the opportunities for partnership, the benefits of sharing project risk and the value add to be achieved by maintaining independence of ownership. Assessment of these competing opportunities is key to the success of the project generator. Oriole operates a project generator model but with a strong emphasis on developing its projects rapidly in order to move them towards the value-adding ‘Evaluation’ phase of the Lassonde Curve. The Board believes this ‘Hybrid’ model combines the returns available from undertaking quality exploration on highly-prospective licences with the risk- mitigation benefits of the project generator model. WWW.ORIOLERESOURCES.COM 07 This strategy has led to Oriole having interests in a number of licences that are moving through the early phases and towards the mine construction, commissioning and production phases Projects Investment Pipeline The Company’s early-stage assets include its projects in Cameroon, a new frontier for gold exploration, where it has earned a 90% interest in the Bibemi and Wapouzé projects and has 90% ownership of a newly granted district-scale project, the Central Licence Package (‘CLP’), in the centre of the country. As projects progress, and financial demands increase, one option for a junior explorer to reduce its exposure to the capital markets is to find a joint venture partner to fund the project in return for an equity stake. This was the approach taken at the Senala (previously Dalafin) project in Senegal, where in 2018 the Company signed a joint venture agreement with IAMGOLD Corp, giving them the right to earn-into a maximum 70% equity position. An experienced Board understands that, to move a project forward, capital is required at either Company level or project level and it therefore needs to assess all potential deals based on their attractiveness compared to the other options available # Project Country Metal interest Operator shareholders. Oriole and with a focus on reducing the risk on returns for the 9 Muratdere Turkey Copper 1.2% - Gold royalty Lodos Residual interests have also arisen on projects that have had partners introduced in Turkey, Djibouti and Egypt. 8 Karaağac Turkey Gold 7 Hasançelebi Turkey Gold Success fee Anadolu Success Bati fee Toroslar 6 Anbat & Hutite Egypt Gold 24.92% Red Sea Resources Oriole maintains an active role in monitoring these projects and aims to maintain Board positions on the joint-venture companies wherever possible. Oriole defines its interests in Cameroon and Senegal as Projects, and its later stage interests as Investments. The Company actively seeks further exploration opportunities, particularly in West Africa, to consolidate its existing 5 Senala Senegal Gold 85% IAMGOLD geographic footprint. Assaleyta, 4 Hesdaba & Djibouti Gold 9.21% TSD Pandora 3 Bibemi Cameroon Gold 2 Wapouzé Cameroon Gold 90% 90% Oriole Oriole 1 CLP (8 licences) Cameroon Gold 90% Oriole ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021ABOUT ORIOLE RESOURCES PLC08 PROJECTS AND INVESTMENTS SENEGAL Senala CAMEROON Bibemi, Wapouzé & Central Licence Package Royalties/investments 01 TURKEY - Anadolu, Lodos & Bati Toroslar (Karaağac, Muratdere, Hasançelebi & Doğala) Projects Bibemi and Wapouzé Cameroon ° Bibemi and Wapouzé are early-stage gold exploration including 1.00m grading 19.33 g/t Au. The system has been projects, covering highly prospective Neoproterozoic Pan- confirmed to at least 100m below surface and remains African greenstone rocks in north-eastern Cameroon; open in all directions. Results from the latest ‘Phase 3’ ° In early 2021, the Company met its financial commitments to earn a 90% interest in the projects as per the terms of an option agreement with local partner BEIG3 and its wholly- owned subsidiary, Reservoir Minerals Cameroon SARL (‘RMC’); programme, completed in December 2021 for 1,385m in nine holes, were reported in February 2022 and further supported the Company’s geological model with best intersections including 9.20m grading 1.31 g/t Au and 2.10m grading 19.04 g/t Au including 1.10m grading 36.06 g/t Au; ° Surface exploration to date has identified four key prospects – Bakassi Zone 1, Bakassi Zone 2, Lawa West and Lawa East. Best results include up to 135.40 g/t Au from selective rock-chip sampling and 9m grading @ 3.14 g/t Au ° The team also completed a 100m x 100m infill soil sampling programme for a total 1,455 sample points covering the southern extension of the Bakassi Zone 1 and Bakassi Zone 2 zones, towards the Lawa West and from trenching; ° During the year, the Company completed three phases of diamond drilling for 6,154.10m in 49 holes, focussed on testing the depth extension of mineralisation identified at the four main prospects with the larger portion of follow- up work being focused on Bakassi Zone 1. Results received during the year delivered best intersections of 6.50m grading 3.92 g/t Au including 1.00m grading 16.79 g/t Au, 5.20m grading 1.97 g/t Au and 2.25m grading 8.82 g/t Au Lawa East prospects respectively. Results announced on 5 January 2022 delivered grades of up to 271 ppb Au and, together with earlier results over the north of the licence, confirmed the system over a strike length of almost 12 km; ° At the earlier stage Wapouzé project, c.20km to the north east, two phases of soil sampling identified c.13km strike length of gold anomalism within the Bataol Zone. Trenching results to date have returned up to 2.00m grading 4.06 g/t Au. WWW.ORIOLERESOURCES.COM 09 02 EGYPT - Thani Stratex Resources (Hutite & Anbat-Shakoosh) 03 DJIBOUTI - Thani Stratex Djibouti (Pandora, Hesdaba & Assaleyta) ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021ABOUT ORIOLE RESOURCES PLC10 PROJECTS AND INVESTMENTS CONTINUED Central Licence Package (‘CLP’) Cameroon ° In Q1-2021 the Company, together with its local partner ° During the period, the Company completed regional BEIG3, received approval for eight licences, covering a contiguous land package of 3,592km2; mapping and stream sediment sampling over the five eastern licences, which identified multiple areas of ° The licences were applied for in 2019 following an in-house, country-wide prospectivity analysis that considered the district to have significant potential to host orogenic-type gold mineralisation. This assessment was made on the elevated gold in distinct drainage basins, associated with the TBSZ corridor. Best results of 291ppb Au and 95ppb Au were returned from Ndom and Tenekou licences with 18 areas grading 30ppb Au or more; basis of host-rock geology, alteration, structural location ° Ranking of these areas enabled the identification of and evidence of gold anomalism (in the form of previous five ‘Priority 1’ zones for a follow-up semi-regional soil historical regional sampling data and artisinal workings), campaign. The first grid to be completed covers the east targeting the regional Tcholliré-Banyo shear zone corridor of Ndom and Mbe permits, for which results are expected (‘TBSZ’), a major splay off the larger-scale Central African in Q1-2022. Sampling of the other four ‘Priority 1’ areas will Shear Zone; continue during 2022; ° The northeast-trending TBSZ corridor, with its associated ° Stream sediment sampling over the three western licences shears, thrusts and faults, are, according to academic is planned to commence in Q1-2022. Notably these licences literature, thought to be one of the significant structural cover more recent (Cenozoic) volcanics that overlie the controls for gold and other mineralisation in the region; deeper Neoproterozoic Pan-African rocks, suggesting ° The Company has a 90% interest in the entire package, with the five eastern licences (Tenekou, Niambaran, the potential for epithermal as well as orogenic-type gold mineralisation; Pokor, Ndom and Mbe) being held directly by the ° On the basis of data collected by the World Bank-funded Company’s subsidiary, Oriole Cameroon SARL, and the countrywide prospectivity analysis, PRECASEM, the entire three western (Mana, Dogon and Sanga) currently held package has recently (December 2021) been flagged as by Reservoir Minerals Cameroon SARL, under the same lying within a significant ‘gold district’; earn-in agreement that controls ownership of Bibemi and Wapouzé. The administrative process to transfer the Reservoir Minerals Cameroon SARL licences into a new subsidiary is currently underway; ° BEIG3 and its associate Roxane Minerals Limited have a collective 10% free-carried interest in each of the Oriole Cameroon SARL licences up until the definition of a minimum Measured and Indicated resource of 50,000 oz Au; thereafter, funding will be pro-rata on a contribute or dilute basis. WWW.ORIOLERESOURCES.COM 11 Senala Senegal ° The Senala gold project lies in the highly-endowed ° On the basis of these results, and previous drilling by the Birimian-age Kédougou-Kéniéba gold belt in south-eastern Company prior to the signing of the option agreement Senegal; ° Oriole owns 85% through its joint-venture with local partner Energy & Mining Corporation S.A.; ° During the period, and under the terms of an option agreement signed in 2018, Canadian mid-tier IAMGOLD Corporation entered the fourth and final year of the First Option period to earn a 51% interest in the project, with a planned exploration budget of US$1.672million. Subject to meeting this commitment, IAMGOLD has the option to spend a further US$4million over two years to earn a total 70% interest in the project; ° The 2021 programme was designed as two phases to target both the northernmost prospect, Faré, which the Company believes has the potential to host a standalone deposit, and the southernmost prospect, Madina Bafé, located ~ 10km west of IAMGOLD’s 2.5Moz Boto mine development project; ° Phase 1 of the programme focussed on Faré and included 689.50m of diamond drilling in two holes to test the depth extension of the main mineralised zone at Faré South, where historical drilling delivered best intersections of 20.00m grading 31.13 g/t Au from reverse circulation (RC) drilling, and 59.60m grading 2.20 g/t Au and 49.50m grading 1.75 g/t Au from diamond drilling. Results confirmed that the orogenic gold system at Faré South extends to depths of at least 350m, with the widest zone of mineralisation returning 70.00m at 1.46 g/t Au, and the system remains open at depth and along strike; with IAMGOLD, a maiden Mineral Resource Estimate was calculated by Forge International Limited, which delivered a JORC-compliant Resource of 155,000 oz Au grading at 1.26 g/t in the Inferred category, based on a 0.3 g/t Au cut-off and a US$1,800/oz pit shell. This Resource sits within a larger JORC-compliant Exploration Target for Faré South of up to 280,000 oz grading at 1.10 g/t Au. Both estimates remain open at depth and along strike; ° The remainder of the Phase 1 exploration programme comprised 4,854m of RC drilling in 42 holes across the Faré North and Faré Far South anomalies, with best intersections of 11.00m grading 1.22 g/t Au and 35.00m grading 3.61 g/t Au respectively; ° Phase 2 of the exploration programme initially focussed on testing the main structural corridor at Madina Bafé, in the vicinity of previous best drilling intersections of 9.60m grading 16.08 g/t Au. A total of 3,111m of RC drilling in 48 holes and 401m diamond drilling in four holes delivered best intersections of 2.00m grading 9.36 g/t Au and 4.00m grading 0.98 g/t Au, both from RC drilling; ° The remainder of the Phase 2 campaign was redirected to Faré for 2,148m of RC drilling in 18 holes, focussed on testing the north eastern extensions of the three main targets. Results were received in January 2022 and delivered intersections of up to 5.00m grading 12.45 g/t Au from Faré South, indicating the high probability for further resource definition on the property; ° IAMGOLD has now confirmed to Oriole that it has met the first option term by investing US$4million in the project over an initial four years, and will be moving to a 51% licence-ownership position. The Company and IAMGOLD are moving through the administrative steps to formalise this position. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021ABOUT ORIOLE RESOURCES PLC12 PROJECTS AND INVESTMENTS CONTINUED Investments Thani Stratex Resources Ltd (‘TSR’) Egypt ° TSR is focussed on the Hodine licence in Egypt that hosts ° In March 2021, TSR signed an agreement with private the Anbat-Shakoosh and Hutite gold projects, both of investment company Red Sea Resources (RSR) with which have identified resources: respect to earning up to an 85% interest in Hodine in return Anbat-Shakoosh: In December 2017, TSR announced a maiden JORC 2012-compliant Inferred Mineral Resource for paying all outstanding fees and charges and making staged expenditure commitments totalling US$2.2 million; Estimate of 209,000 oz at 1.11 g/t Au within porphyry sills, ° Following a successful renewal of the Hodine licence, although the geometry of these sills is yet to be fully drilling commenced at Hutite in Q4-2021 as part of RSR’s resolved. Potential upside has also been highlighted within First Option to spend US$1.2 million on exploration within the granodiorite, where an Exploration Target has been 12 months in return for an initial 51% interest in Hodine. RSR identified; Hutite: The mineralised system is hosted by a melange of ultramafic/mafic rocks, representing one of the many suture zones between tectonic terranes in the eastern desert of Egypt and as seen all over the Arabian Nubian Shield. Although TSR has not completed any work at this project since acquiring it in 2014, former operator Thani Ashanti drilled over 30,000m of RC and diamond drilling between December 2010 and March 2013. On the basis of this work, South Africa-based Quantitative Group estimated an Inferred Resource (non-JORC) of 11,410,000 tonnes grading 1.41 g/t Au for 520,000 in-situ ounces using 0.40 g/t Au cut-off. currently holds a 7% interest in the holding company for Hodine, with TSR holding the remaining 93%. In the event that TSR’s position is diluted below 10%, its holding shall be converted to a 1.5% net smelter return (NSR) royalty on future gold production from the licence; ° As at 31 December 2021, Oriole’s holding in TSR stood at 24.92%. WWW.ORIOLERESOURCES.COM 13 Thani Stratex D jibouti Ltd (‘TSD’) D jibouti ° Since late 2019, TSD has been funded and operated by its largest shareholder African Minerals Exploration & Development Fund III (AMED Fund III), with Oriole represented at the board-level; ° Exploration has mostly been focused on the following three projects within the Afar epithermal province of the East African Rift Valley: Pandora: The 93km2 Oklila licence, which includes the Pandora vein target, covers an epithermal system were also received with best results of 36.90g/t Au, 19.00g/t Au, and 10.35 g/t Au returned for Red Horns, Caravan, and Maranzana targets respectively. Phase 2 drilling commenced with results from selective sampling of one diamond drill hole at Red Horns (received in Q4-2021) returning best intersections of 19.80m at 1.18g/t Au and 10.75m grading at 26.27 g/t Au which includes a bonanza- grade interval of 1.22m at 211.0 g/t Au. Further results from the programme are pending; that comprises over 10km strike length of outcropping Assaleyta: Located c.16 km to the north of Pandora, and inferred veins. Three phases of drilling have been low-sulphidation epithermal gold occurs as high-grade completed between 2017 and 2021 (totalling ~6,550m). veins and disseminated mineralisation in rhyolite domes. Best results from the Phase 3 campaign included Phase one drilling in 2017 confirmed sub-surface gold 16.86m grading 1.42 g/t Au from 13.00m, including 6.63m mineralisation of up to 17.40m grading 2.24 g/t Au from at 2.68 g/t Au, yielded from the north western end of surface and 3.16m grading 6.79 g/t Au from 20m. Phase 2 Pandora and at the south eastern end of the Pyrrha drilling commenced in Q1-2021 with best results of 16.00m prospect. No work was completed at Pandora during at 1.08 g/t Au and 5.00m at 8.97 g/t Au from selective the year; Hesdaba: Located 10km northwest of Pandora, TSD has completed detailed mapping that has identified veins over a combined strike length of 16km, with three primary targets identified: Maranzana, Caravan, and Red Horns. During the year, the remaining results from 2020 Phase 1 drilling were announced, with additional best intersections of 1.0m at 2.1 g/t Au, supplementing the previously reported best intersections of up to 15.00m at 4.08 g/t Au at Red Horns. Final results of the 2020 rock chip sampling sampling of five RC drill holes, and 38.10m at 2.21 g/t Au from selective sampling of two diamond drill holes. In Q4-2021, results from selective sampling of a further 11 RC holes include 12.00m at 0.53 g/t Au. Further results from the programme are pending. ° As of October 2021, Oriole’s interest was reduced to 9.21% due to the completion of the second tranche of funding by AMED Fund III. TSD was therefore considered no longer material to the group and regular reporting no longer required. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021ABOUT ORIOLE RESOURCES PLC14 PROJECTS AND INVESTMENTS CONTINUED Hasançelebi and Doğala projects Karaağac Gold project Turkey ° In 2019, the Company’s wholly-owned subsidiary, Stratex Turkey ° Karaağac is located 300 km west-south-west of Ankara and Madencilik Sanayi ve Ticaret Limited Şirketi (‘Stratex mineralisation is hosted by an outcropping thrust zone and Madencilik’), signed an exploration agreement with altered limestone. Bati Toroslar Madencilik Ltd. Şti. (‘Bati Toroslar’) for the Hasançelebi and Doğala high-sulphidation projects which will result in a US$500k success-based payment on delivery of a minimum JORC-compliant indicated and/ or measured gold resource of 100,000 oz (with a 0.3 g/t Au cut off), defined within the oxide and transition zones at Hasançelebi, and the completion of an Environmental Impact Assessment. ° Following the sale of Oriole’s 1.5% royalty on the projects in 2020, a further US$220k is due to Stratex Madencilik once Hasançelebi moves to the mine-development stage; ° In March 2019, the Company’s partner Anadolu Export Maden Sanayi ve Ticaret Limited Şirketi (‘Anadolu’), 96%-owned by Istanbul-listed ODAŞ Elektrik, confirmed the definition of a JORC-2012 compliant Measured, Indicated and Inferred resource of 348,150 oz Au and 2,832,036 oz Ag (0.2 g/t Au cut-off) ° Under the terms of the Agreement, definition of this JORC- resource triggered the payment by Anadolu of a US$500k success-based fee. US$75k of this was received in 2019 but the balance remains outstanding and, during the Period, the Company has been engaged in legal proceedings ° During the period, drilling continued at Hasançelebi as Bati to recover the outstanding US$425,000 plus VAT. The Toroslar move towards resource definition. Company has a strong case and remains hopeful of a positive outcome; ° Following the sale of Oriole’s 1.5% NSR royalty to Anadolu in 2020, the Company remains entitled to a further US$250k when the project moves towards mine construction. Muratdere Turkey ° Muratdere is a substantial copper-gold porphyry system located west of Ankara with significant silver, molybdenum and rhenium credits. The project has a JORC-compliant Inferred resource of 51 million tonnes, comprising 186,000 tonnes Cu, 204,296oz Au and 3.9million oz Ag, that remains open along strike and at depth; ° According to a previously reported Feasibility Study, an initial optimised resource of 16 million tonnes will be processed over a 16-year mine life, for total metal in concentrate of c.68,000 tonnes copper, c.32,000 ounces gold and c.955,000 ounces silver (announcement dated 11 March 2015); ° In November 2019, the Company executed share purchase and royalty agreements with its partner Lodos Maden Yatırım Sanayii ve Ticaret A.Ş. (‘Lodos’), a wholly-owned mining investment company of Istabul-listed investment company Pragma Finansal Danışmanlık Ticaret A.Ş that resulted in the Company’s equity interest in Muratdere being converted to a 1.2% post-tax NSR royalty; ° Lodos is preparing to submit an updated Environmental Impact Assessment (‘EIA’) and a decision is expected in 2022. More detail of the above Oriole projects and investments can be found on the Company’s website: www.orioleresources.com WWW.ORIOLERESOURCES.COM CHAIRMAN’S STATEMENT 15 “ I am delighted to have stepped into the role of Chair of Oriole in the last month and I am looking forward to working with the team to push the business forward at what is an exciting stage of its development.” Eileen Carr Non-Executive Chair The Board I’m joining took up their responsibilities in 2018, at a time when the Group was poorly funded, had a falling market capitalisation and had no active exploration projects of its own. The hard work completed over the past four years has delivered significant progress, with a determined and aggressive return to early-stage exploration, opening up the new gold exploration frontier of Cameroon and following the value creation path of a well-run junior exploration company. Operations Senala, Senegal At Senala, IAMGOLD continued to push forward with its earn-in, completing significant drill programmes either side of the West African rainy season. In 2021, IAMGOLD delivered 7,002m of RC drilling and 689m of diamond drilling at the northernmost Faré prospect, and 4,912m of RC drilling at the Madina Bafé prospect in the south. IAMGOLD has confirmed Exploration companies don’t always see the increasing share that it has met the initial US$4 million of expenditure price their results deserve, as these gains tend to come in across the first four years of the Option Agreement dated sharp rises around resource estimate announcements, and 28 February 2018 required in order to secure a 51% interest in so I am glad to see the team pursuing an aggressive business the Senala project and that it intends to exercise this option model, designed to deliver results quickly and at the lower once the expenditure figures have been reviewed and agreed end of the cost curve. with the Company. Oriole follows the principles of good exploration but also The work completed at the Faré South target, when combined combines that with the benefits of a project generator with drilling results achieved by Oriole prior to the Option model. Single-project companies carry a high level of risk Agreement, enabled the Group to publish a maiden resource geologically, operationally, and geo-politically, but spreading estimate of 155,000 oz Au grading 1.26 g/t Au (announcement that risk by having multiple projects in different countries dated 23 August 2021). IAMGOLD’s subsequent drilling within the region should provide a more secure route confirmed further substantial gold anomalism around this to Group success. The Company has operated a project system, reinforcing management’s belief that Faré has the generator model for many years and retains a number of potential to host a stand-alone deposit. legacy positions that it actively manages with a view to realising cash to fund its ongoing exploration. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021ABOUT ORIOLE RESOURCES PLC16 CHAIRMAN’S STATEMENT CONTINUED CHAIRMAN’S STATEMENT Bibemi, Wapouzé and the Central Licence Package, Cameroon Progress at Bibemi has been rapid during 2021, with three We see great potential in Cameroon as a new frontier for gold exploration and note increased interest from the wider exploration community, with a number of new licences phases of drilling completed on the licence for 6,154m. Early applied for by our peers. We remain confident that our first in the year, our maiden drilling programme tested four mover position has enabled us to secure what we consider to targets and confirmed gold at each of them. At the Bakassi be the most prospective ground and welcome the increased Zone 1 target, we identified zones of mineralisation up to interest, which will ultimately make it easier to operate in 12m wide and have further drill tested this area, with great Cameroon, as having more active companies will increase the success, in follow up programmes during the latter part of availability of skilled labour and drilling equipment. the year (announcement dated 9 February 2022). We are increasingly confident that the gold anomalism observed at Bakassi Zone 1 extends a further 3km along strike towards the Investments and Royalty positions The Group has a range of investment and potential royalty Lawa West target, offering ample opportunity to expand the positions arising from its exploration activities in prior years. exploration programmes. Due to the structural complexity We take an active interest in managing these positions, with at Lawa West and Lawa East, we are currently undertaking the ultimate goal of maximising shareholder value, either a geophysics programme in the area with the aim of through realisation or conversion into a royalty position. The identifying more drill targets. most significant positions within the Group are set out below. Exploration at Wapouzé is less advanced than at Bibemi, although soil sampling in 2019 identified cumulative gold Thani Stratex Resources (‘TSR’) The Group holds a 24.92% interest in TSR, the legacy of a joint anomalism over 13km in length. Results from the follow-up 2021 venture with Thani Ashanti Alliance Limited (‘Thani Ashanti’), trenching work programme returned grades of up to 2.00m that is focussed on the Hodine licence in Egypt. During the grading 4.06 g/t Au (announcement dated 9 February 2022). year, TSR entered into an earn-in agreement with Red Sea Under the terms of the earn-in agreement with our well- established local partner, Bureau d’Etudes et d’Investigations Géologico-minières, Géotechniques et Géophysiques SARL (‘BEIG3’), we have reached the required milestones to take 90% ownership of both licences. We have submitted the paperwork for the transfer of these licences to our local subsidiary and await confirmation from the Ministry of Mines that the administrative process and transfer have been completed. Early in the year, we were delighted to receive confirmation of eight licence awards for the Central Licence Package (‘CLP’) project in central Cameroon (announcement dated 3 February 2021). This provides a contiguous 3,952km2 block of licences, covering an area that is highly prospective for orogenic-style gold mineralisation. Five of these licences are held directly by our 90%-owned subsidiary, Oriole Cameroon SARL, with the other three held by Reservoir Minerals Cameroon SARL, under the same earn-in agreement that controls ownership of Bibemi and Wapouzé. As with Bibemi and Wapouzé, we are awaiting confirmation of their transfer into our legal ownership thereby formalising our 90% ownership. Work at the CLP project has been progressed quickly. Following an initial remote sensing study early in 2021, we were able to undertake a stream sediment sampling programme across the five easternmost licences before the rainy season took hold mid-year. Follow-up work has already commenced based on the results of that work and a stream sediment programme is planned for the three western licences. Results to date have been very encouraging, confirming significant zones of gold anomalism. Resources Limited (‘RSR’), by which RSR resolved a number of outstanding liabilities in return for an initial 7% stake and now has the option to earn an overall 85% interest by incurring US$2.2 million of exploration expenditure by March 2023. It is ultimately expected that TSR’s position will convert to a 1.5% royalty as RSR advance this project to production. With resources totalling 729,000 oz Au already identified on the licence, there is an expectation that the Group’s equity share of this royalty could be of appreciable value. Thani Stratex Djibouti (‘TSD’) TSD is focussed on the exploration of gold projects in Djibouti and is another legacy asset arising from the historical joint venture with Thani Ashanti, with Oriole’s interest currently standing at 9.21%. Whilst we maintain board representation, we are increasingly frustrated by the slow progress being made as it is creating a high ratio of G&A to exploration expenditure. The projects have great promise, having delivered encouraging results including 15m grading 4.08 g/t Au (announcement dated 22 December 2020) but a faster rate of progress is needed in order to deliver an effective and financially efficient exploration programme. Turkey The Company’s first projects were in Turkey and residual interests are still held across a number of licences. The ownership of all these licences has now passed to third- parties, who are advancing the projects. In 2022, we will maintain a representative presence in Turkey in order to maximise returns from these remaining interests. WWW.ORIOLERESOURCES.COM ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021 17 I A B O U T O R O L E R E S O U R C E S P L C Chief among these is our 1.2% royalty in the Muratdere copper-gold project in Turkey. The Company’s joint-venture partner, Lodos Maden Yatırım Sanayii ve Ticaret A.Ş. (‘Lodos’), is close to submitting its Environmental Impact Assessment (‘EIA’) report and we are await the successful conclusion of this key phase. With a copper price that has risen by 60% over the last two years, we see significant value attaching to this asset as it moves through the regulatory phases. Elsewhere in Turkey, we have ongoing court cases for the recovery of US$425k from Anadolu Export Maden Sanayi ve Ticaret Limited Şirketi (‘Anadolu’) and US$960k from NTF Insaat Ticaret Ltd Sti (‘NTF’), both former joint-venture partners. These debts are fully provided against in the financial statements, but we hold a very strong legal position in both cases and anticipate an eventual successful resolution. At the Hasançelebi and Doğala gold projects in Turkey, the Company signed an exploration agreement with Turkish private company Bati Toroslar Madencilik Sanayive Ticaret LTD. Sti (‘Bati Toroslar’) in 2019. The agreement provides for the payment of a US$500k success-based fee upon successful definition of a minimum 100,000 oz Au JORC- compliant resource and completion of the EIA. Drilling has been ongoing through 2021 and work towards resource definition is progressing. Covid-19 The management team successfully adapted the Group to work within the restrictions imposed by the Covid-19 pandemic. Whilst restrictions are easing in the UK, it is important to remember that we work in parts of the world where the vaccine rollouts are still in progress. As such, although we expect there to be little impact on our operations in 2022, we continue to monitor the situation carefully. During 2021, we arranged for the vaccination of our Cameroonian workforce, on a voluntary basis, and will ensure this facility remains available to our team. AGM Update The Company’s AGM is scheduled for 26 April 2022 at the offices of Grant Thornton UK LLP, 30 Finsbury Square, London, EC2A 1AG. Whilst we expect this will be an open meeting, the Company encourages all shareholders to vote via proxy form in advance of the meeting date. The Company shall inform shareholders via regulatory announcement if the meeting needs to revert to being a closed meeting. Outlook On behalf of the Board, I would like to thank John McGloin for his work over the last three and a half years. He has led the Board ably through that period and leaves with the best wishes from us all. John leaves the Group in good shape and with a clear strategy to deliver shareholder value by performing high-quality exploration work in highly prospective gold districts. The results at Bibemi offer great encouragement and the opportunity provided by the Central Licence Package, a district-scale play that is already proving to host significant gold anomalism, is huge. I’m very pleased to be taking over from John at this exciting stage. We have a strong team throughout the business and, on behalf of Oriole’s Board of Directors, I would like to express our appreciation and thanks to all of our employees for their continued dedication and professionalism during the past year, and our shareholders for their continued support. Eileen Carr Non-Executive Chair 8 March 2022 18 WWW.ORIOLERESOURCES.COM Operational and Financial Review “ The Group’s main operations are split between active exploration projects and the management of our investment and royalty positions.” Tim Livesey Chief Executive Officer Principal Activities In addition, there are steadily diminishing proven resources at the main gold producers and so the Board believes the need The principal activity of the Group is the exploration to find new resources will ultimately drive their increased and development of gold and other high-value base appetite for supporting the activities of junior exploration metals projects. companies like Oriole. Strategic approach Business performance The Board’s strategy is to establish the Company as a leading value-adding project-generator in our chosen mineral 2021 Operations The Group’s main operations are split between active specialisations and in our geographic areas of operation. exploration projects and the management of its investment The Board seeks to acquire exposure to highly-prospective and royalty positions. districts, primarily in West Africa, and the Group has developed a first-mover position in Cameroon, an exciting new frontier for gold-exploration. The Board aims to develop a portfolio of projects that cover a range of mineral deposits across multiple jurisdictions, thus mitigating sovereign, technical and operational risks. Impact of Covid-19 Coming into 2021, the Covid-19 pandemic was still very much an issue globally but had limited impact on the Company’s operations. The Group has been operational in Cameroon for the whole of 2021, with three phases of drilling completed and extensive work programmes continuing across all The Group finances its activities through the monetisation of its licences. more advanced projects and through periodic capital raisings. Business environment The price of gold was relatively stable during the year, with a small decrease from an opening position of US$1,894 per ounce, to US$1,815 per ounce at 31 December 2021. This level of gold price has been sustained since July 2020 and, in the context of Oriole, is 50% higher than when the Company was rebranded in 2018. In March 2020, as an immediate response to the developing pandemic, the Board and management team took substantial pay cuts in order to preserve funds in uncertain times. As 2020 ended, it became clear that Oriole could function as normal in the ‘new world’ and so these measures were unwound to return employees and suppliers back to contractual rates. The Group continues to work flexibly, and with staff safety a prime concern, but the UK team has been operating from the Company’s Exploration Office in Eastleigh whenever government regulations have allowed. Oriole Resources PLC Company number: 05601091 Registered office: 180 Piccadilly, London, W1J 9HF, UK The Directors present their strategic report on the Group for the year ended 31 December 2021. 1919 I S T R A T E G C R E P O R T The Board believes the impact of Covid-19 on its 2022 ground that had been identified by the Group as part of a operations will not be significant but it continues to monitor prospectivity review in the summer of that year. The licence the situation. Active Exploration projects The primary focus for the Group’s own exploration activities is its position in Cameroon. In 2018, the Group signed an earn- in agreement with BEIG3 to gain a majority interest in the Bibemi and Wapouzé licences in northern Cameroon. Work on the licences in 2019 and early 2020 provided encouraging results and, in early 2021, a maiden drilling programme was completed for 3,118m at Bibemi. The Group subsequently completed two further phases of more targeted drilling during H2-2021 and continues to be encouraged by the results. The Bakassi Zone 1 prospect has been the main focus grants were received in February 2021 and a regional stream sediment sampling programme was completed across five of the licences early in 2021. Results from those samples enabled the geological team to target significant areas of gold anomalism, within specific drainage basins, and a substantial targeted soil sampling programme commenced in autumn 2021. That programme is still ongoing and similar programmes of stream sediment sampling and soil sampling are planned to be completed on the three remaining licences in 2022. At the 472km2 Senala licence in Senegal, Canadian-listed gold miner IAMGOLD focussed on diamond and RC drilling of the drill campaigns to date and the mineralised corridor at both the Madina Bafé and Faré targets, with particularly has been confirmed over more than 1km of strike; it remains good results returned from Faré. During the year, the open in all directions and at depth. Work is continuing in Company independently commissioned a maiden Mineral 2022, with a geophysical survey already underway to further Resource Estimate for the Faré South target and announced understand the structures at three additional targets, an initial resource of 155,000 oz grading 1.26 g/t Au in the namely Lawa West, which may prove to be an extension of Inferred category, within a larger Exploration Target of up the Bakassi Zone 1 prospect, Lawa East and Bakassi Zone to 280,000 oz Au grading 1.10 g/t Au. This does not include 2. The geological team is currently designing follow-up any of the potential resources from the Faré North and Faré programmes. Trenching at Wapouzé has also been completed and all data is currently being reviewed ahead of designing future programmes. Far South targets, with recent drilling at the latter having delivered up to 35.00m grading 3.61 g/t Au. Under the terms of the Option Agreement, IAMGOLD was obligated to spend US$4 million on the licence by 28 February 2022. The Company has now received confirmation from The Group has now reached the expenditure target defined IAMGOLD that, subject to review by the Company, the within the 2018 option agreement signed with BEIG3 and expenditure target has been reached. Subject to is moving through the process to take 90% ownership of review and confirmation of this point, the first both licences. Additionally, in 2019, the Group applied for a district-scale package of licences – the Central Licence Package - in central Cameroon, covering 3,592km2 of highly prospective option will be triggered and IAMGOLD will move to a 51% ownership position. STRATEGIC REPORT 20 OPERATIONAL AND FINANCIAL REVIEW CONTINUED Investment and royalty positions The Company has a long history of gold and base metal aggressive exploration programme that was outlined to the TSR shareholders in 2019, of 40,000m drilling within three exploration success. This history has left it with a valuable years and development of resources, has failed to materialise portfolio of legacy assets throughout East Africa and Turkey, which, even taking Covid-19 into account, is disappointing. which are the subject of an on-going asset realisation programme. The management team actively manages these assets, including taking up Board positions where possible in order to assist with value maximisation. Two of these assets, a 24.92% holding in TSR, and a 9.21% holding in TSD, arise from a legacy joint-venture agreement between the Company, whilst under previous management, and Thani Ashanti. With Turkey continuing to face economic issues, which impacted the Group’s consultancy income, the Board took the decision to close the Company’s Turkish office. The Group has put in place arrangements to manage its interests in Turkey, with up to US$2.4 million to be collected from the agreements that are in place with former partners. At the Group’s former Karaaǧaç gold project in Turkey, pursuit of The investment in TSR covers the Hodine licence in Egypt the U$425k owed by the operator, Anadolu, is still ongoing. that hosts the Anbat and Hutite projects. At Hutite, former During the year, the Group won an interim injunction against operator Thani Ashanti drilled over 30,000m of RC and Anadolu and were able to send lawyers into the company’s diamond drilling between December 2010 and March 2013. Ankara offices to ascertain what assets would be available. On the basis of this work, South Africa-based Quantitative Turkish justice has moved slowly, particularly in light of Group estimated an Inferred Resource (non-JORC) of 11.41 Covid-19, but it is moving in the right direction. The Group million tonnes grading 1.41 g/t Au for 520,000 ounces (in- is now working to bring the parent company, Odaş Electrik, situ) using 0.40 g/t Au cut-off. At Anbat, TSR has previously into the interim injunction. In the meantime, the Group has announced a maiden JORC 2012-compliant Mineral Resource rejected two unacceptable offers of settlement from Anadolu Estimate of 209,000 oz at 1.11 g/t Au within porphyry sills and remain extremely confident that, if this case makes it to (announcements dated 6 and 13 December 2017). Operation court, the Group will win the full sum due, plus damages and of this project has now been taken over by RSR, who has costs. Following the sale of a royalty right to Anadolu in 2020, acquired an initial 7% interest and is spending US$2.2 the Group is also contingently owed US$250k from Anadolu million to earn a total 85% interest in the Hodine licence. should the Karaaǧaç project receive Environmental Impact Progress has been rapid and focussed, with 2,300m of Assessment (‘EIA’) approval and move to mine construction. drilling completed in the final two months of 2021. Whilst The Group continues to monitor progress on this and has the Company will see its ownership diluted, the ultimate aim retained the right to take the royalty back if Anadolu defaults is for Oriole to retain a significant interest in the 1.5% royalty on that payment. that will go to TSR upon that company being diluted below a 10% holding in Hodine. The Group is also awaiting news of a US$960k debt owed by NTF, a former partner in Turkey, who defaulted on tax Disappointingly, the progress at TSD has been less payments that were originally due in 2017. Progress on this impressive. TSD became a standalone vehicle in late 2019 has been held up by a preceding case involving NTF but the and is now funded and managed independently of TSR. The Board hopes for a resolution of that case in 2022, which may company is focussed on the exploration of epithermal gold allow a quick settlement with NTF. projects in Djibouti, namely Pandora, Assaleyta and Hesdaba, with African Minerals Exploration and Development Fund lll (‘AMED Fund lll’) having taken over operational control in 2019, following a general meeting of the shareholders in TSR who at that time held 50% of TSD and had operational control. Unfortunately, though Oriole voted against the deal proposed, a majority voted in favour and control passed to AMED Fund lll. After initial encouraging signs, whereby the Company was able to report 6,907.50m drilled in 2020, progress has slowed substantially whilst costs have far out- stripped the exploration progress made. In the last nine months of 2021, TSD managed to drill only 887.70m and have now drilled only 10,990.70m in two years at a cost of well over US$5 million. This arrangement has significantly diluted minority shareholders without adding significant value to TSD overall. The Board still firmly believes in the potential of the Djibouti licences but the well-funded Meanwhile, there has been good progress at the Hasançelebei project, with 11,421.40m drilled during the year. The Group is due to receive US$500k from its partner Bati Toroslar when this project passes EIA stage, and a further U$220k once mine construction commences. At the Muratdere copper-gold project in northern Turkey, the Company holds a 1.2% royalty position. The revised EIA for this project is close to submission by the Company’s joint- venture partner, Lodos, with the expectation of a successful application. The Group continues to engage with royalty companies with regards to the sale of this asset. WWW.ORIOLERESOURCES.COM 21 Financial Review: Whilst the loss for the year rose to £1,569k (2020: £320k), a significant proportion of this £1,249k increase, was due to the senior management team. However, the Board believes it appropriate to use a measure readily accessible from the audited accounts. revaluation of the Senala project from Euros into Sterling at In October 2021, the Company completed a £1.8 million fund the year end. This revaluation contributed towards the £571k raise and this, alongside funds from warrant exercises earlier of foreign exchange losses in the year, compared to £317k of in the year, enabled the Group to complete three phases gains in the prior year. It is important to note that this adverse of diamond drilling at Bibemi, totalling 6,154.10m, and start swing of £888k has no monetary impact on the Group. work on the district-scale Central Licence Package that was Of the profit and loss items the Group has control over, it was pleasing to note only a small (6%) increase in administrative expenses to £1,083k (2020: £1,018k) which, given the unwinding of the cost saving measures taken in 2020 to protect the business from the financial uncertainty caused by the Covid-19 pandemic, is a very pleasing result. The Board remains committed to reducing administrative costs, whilst granted to the Group in February 2021. The Board continues to target expedited exploration work, whilst at all times following the systematic exploration model that ensures exploration techniques are deployed at the appropriate time. The capitalised exploration expenditure of £2,018k demonstrates the determination of the Board to focus its available funding appropriately, on the projects themselves. increasing investment in its geological programmes. The Group continues to look for opportunities to raise cash from asset disposals, with the most frequently discussed asset being its 1.2% net smelter returns royalty on the Muratdere copper-gold project in Turkey. The Company received two non-binding offers during the year but the Board believes that once the regulatory hurdle of an approved EIA is achieved, the prospects for a sale at a much higher price will be enhanced. The residual holdings in Thani Stratex Resources and Thani Stratex Djibouti have been maintained at current carrying values. The Group continues to look for opportunities to realise value from these two projects. Two other significant profit and loss movements impacted the results for the year. Within other income, the net profit from the Turkish consultancy business dropped by £100k, reflecting a very difficult period for the Turkish economy. In response to consultancy sales dropping off, the Group has moved to reduce its exposure in Turkey and in 2022 will maintain only a part time presence, with the express aim of continuing to represent the Group’s interests in the country, where there is an identifiable US$2.4 million of potential income, excluding the Muratdere royalty. These new managerial arrangements already show some promise, with a US$22k sale of a small antimony royalty completed subsequent to the year end. Elsewhere, the 2021 tax refund for the Group’s research and development activities was £119k less than that received in 2020. This reflects the fact that Covid-19 curtailed the 2020 field season, which is the basis of the expenditure behind the tax receipt in 2021. The Board expects the tax refund to return to a more significant level in 2022, given the Company’s exploration spend of £1,778k in 2021. The Group’s stated aim is to use the funds available to advance its projects as effectively as possible. This means using as much of the funds available on exploration and as such, the Board is dedicated to following the exploration route to success by interpreting results, planning the next phase, raising capital and executing the plan. In the long run, this minimises the spend on administration whilst building value in the projects. The key KPI measure the Group has adopted is cash-flow based, measuring the spend on the intangible assets (the projects) against the total spend on operations and investing. On this measure, 63% of the 2021 spend was on direct exploration work on the licences. Of course, a significant proportion of the other costs are also geologically related as they include the wages of the ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT22 OUR GOVERNANCE Organisation overview The Board of Directors was fully refreshed in 2018 and was strengthened during 2021 by the appointment of Claire Bay, Executive Director for Business Development and Exploration, who has been a key member of the Group’s management team for a number of years. In December 2021, the Company announced that John McGloin would retire from the Board in February. The directors took this opportunity to refresh the balance of the Board, with the appointment of Eileen Carr, who has held finance related During 2021, the committee comprised John McGloin (Non-Executive Chairman) and David Pelham (Independent Non-Executive Director). No Director took part in discussions concerning the determination of their own remuneration. Principal risks and uncertainties The Group’s operations are exposed to a variety of risks, many of which are outside of the Company’s control. Exploration Industry Risks: Mineral exploration is speculative in nature, involves many roles in the Natural Resources sector since the early 1990’s. risks and is frequently unsuccessful. Following any discovery, The Company is delighted to have Eileen on board and it can take a number of years from the initial phases of gives John its best wishes in his new role as Chief Executive drilling and identification of mineralisation until production Officer of Diamond Fields Resources Inc. The Board is ably is possible, during which time the economic feasibility supported by a management team that, for many years, has of production may change. Substantial expenditures are delivered successful exploration projects. The Board of Directors The Board is responsible for providing strategic direction required to establish mineral reserves and to construct mining and processing facilities. As a result of these uncertainties, no assurance can be given that the exploration programmes undertaken by the Group will result in any new for the Group, setting objectives and management policies commercial mining operations being brought into operation. and agreement on performance criteria. The Board monitors Government activity, which could include non-renewal of compliance with objectives and policies of the Group licences, may result in any income receivable by the Group through monthly performance reporting, budget updates being adversely affected. In particular, changes in the and monthly operation reviews. The current composition of the Board is three Executive Directors and two Non-Executive Directors. The Board application or interpretation of mining and exploration laws and/or taxation provisions in the countries in which the Group operates could adversely affect the value of its interests. believes that the composition of the Board provides an These risks are mitigated as much as possible by building appropriate mix to conduct the Group’s affairs at the present and maintaining a pipeline of projects at various stages of time, and the Nomination Committee (comprising the Non- development, by employing highly experienced and highly Executive Directors) keep this under regular review. trained geologists, both at Board level and at the operational The Audit Committee The Audit Committee provides a formal review of the effectiveness of the internal control systems, the Group’s financial reports and results announcements, and the level and by maintaining good relationships with the Governments of the countries in which we operate. Political risks: All of the Group’s operations are located in foreign external audit process. During 2021 the committee comprised jurisdictions. As a result, the Group is subject to political, John McGloin (Non-Executive Chairman) and David Pelham economic and other uncertainties, including but not limited (Independent Non-Executive Director). The external auditors to, changes in policies or the personnel administering them, and Bob Smeeton the Chief Financial Officer attend by terrorism, nationalisation, appropriation of property without invitation when appropriate. No internal control issues were identified during 2021 requiring disclosure. The Remuneration Committee The Remuneration Committee provides a formal fair compensation, cancellation or modification of contract rights, foreign exchange restrictions, currency fluctuations, export quotas, royalty and tax increases and other risks arising out of foreign governmental sovereignty over the areas in which these operations are conducted, as well as risks of loss due to civil strife, acts of war, guerrilla activities and transparent review of the remuneration of the and insurrection. Executive Directors and senior employees and makes recommendations to the Board on individual remuneration packages. This includes the award of non-contractual performance related bonuses and share options. Remuneration packages are designed to reward, motivate, retain and recruit individuals. Bonuses are only paid in recognition of performance. The Board aims to only conduct operations in those countries with a stable political environment and which have established acceptable mining codes. The Company adheres to all local laws and pays heed to local customs. WWW.ORIOLERESOURCES.COM ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021 23 I S T R A T E G C R E P O R T Financial and liquidity risks: The main financial risks facing the Group are the availability of The Group does not operate within the European Union and as a result the Directors have seen limited impact on the adequate funding and fluctuations in foreign exchange rates. business from the UK’s exit from the European Union and The Group’s main source of finance is the monetisation of projects supported where necessary by the issue of share capital. Tight budgetary and financial controls are maintained across the Group. The Group only deals with high-quality banks. It does not hold derivatives, does not trade in financial instruments, does not engage in hedging arrangements and does not enter into binding commitments for exploration expenditure. The use of interest-bearing deposit accounts is maximised and cash flow forecasts are constantly updated and reviewed by the Board. Foreign exchange risks: The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, which is tied to the Central African Franc which is the operational currency of Cameroon, and US Dollar, which is the currency predominantly used by suppliers of drilling equipment and services. The Group’s exposure to foreign exchange movements is set out in Note 19 of the Accounts. Risks to exchange movements are mitigated by minimising the amount of funds held believe any impact will be limited to the effects of potential increased foreign exchange fluctuations. This may mean exploration costs rise, as the Group primarily operates in West Africa, where currencies are typically linked to the Euro. However, the Directors do not expect there to be any significant lasting impact. Liquidity risk: The Group’s liquidity risk is considered to be significant as it is a pre-revenue business. The Directors regularly review the opportunities for asset realisation and the need for further equity raising. The Group does not enter into binding commitments for exploration expenditure. Cash forecasts are updated continuously. The financial exposure of the Group is substantially reduced by partnering with third parties in exploration joint ventures. Future developments The Company advances its exploration projects on the basis of analysing results to date, deciding on the most cost effective techniques for the next stage and raising funds to support those activities as appropriate. In addition, overseas. All treasury matters are handled centrally in the UK. the Company regularly reviews potential new exploration All requests for funds from overseas operations are reviewed projects at various stages of development, and based within and authorised by Board members. The Group hedges its the European and African time-zones. exposure to foreign currency by budgeting in the currencies that will be required to fund its exploration programmes, and then holding sufficient cash in those currencies to meet those requirements. No further hedges are required to manage this foreign exchange exposure and the Group Key performance indicators The Board monitors the following KPI’s on a regular basis: ° Share price versus its peer group; recognises the profits and losses resulting from currency ° Exploration expenditure as a percentage of total fluctuations as and when they arise. expenditure. The Board has established a 60% or more target for this metric and in 2021 achieved 63%. Due to the impact of Covid-19 on the exploration programme, there is no valid comparison for 2020. 24 SECTION 172(1) STATEMENT Promotion of the Company for the benefit of the members as a whole. The Board of Director’s believe they (‘the Directors’ or ‘we/ ° Fundraising to support early-stage exploration at the our’) have acted in the way most likely to promote the Central Licence Package (‘CLP’) project, Cameroon: the success of the Company for the benefit of its members as a fund raise referred to above also provided working capital whole, as required by s172 of the Companies Act 2006. for the first stages of exploration work at the newly The requirements of s172 are for the Directors to: acquired CLP project in Cameroon. This extensive package of land provides an opportunity for the Group to establish ° Consider the likely consequences of any decision in the a brand-new gold district, and the Board believed raising long term, ° Act fairly between the members of the Company, ° Maintain a reputation for high standards of business conduct, ° Consider the interests of the Company’s employees, ° Foster the Company’s relationships with suppliers, customers and others, and funds to support this early-stage work was justified by the prospectivity of the ground, and will ultimately provide significant value accretion for the Group. ° Pursuit of an aggressive asset realisation strategy: the Board continues to believe an asset realisation strategy is in the best interests of shareholders, in order to provide funds for exploration work on our primary projects. Two royalty and one investment position were realised in the ° Consider the impact of the Company’s operations on the prior year, and the Board continues to actively look for community and the environment. further opportunities. The Company operates as a gold-exploration business, which is inherently speculative in nature and, without regular income, is dependent upon fund-raising for its ° Appointment of a third Executive Director: During the year the Directors decided to promote Claire Bay to the position of Executive Director, Exploration & Business Development continued operation. The pre-revenue nature of the business in recognition of her importance in the management is important to the understanding of the Company by its members, employees and suppliers, and the Directors are as transparent about the cash position and funding of the Group’s activities and the need to develop and retain our key employees. At the same time, the Board considered the need for a third Non-Executive Director in requirements as is allowed under the regulations for quoted order to maintain Board balance and decided that a newly companies and of the AIM Market. The application of the s172 requirements can be formed Nomination Committee, comprising the two Non- Executive Directors, would keep this matter under review. demonstrated in relation to some of the key decisions made As a gold exploration company operating in West Africa, during 2021: ° Fundraising to support drilling at Bibemi, Cameroon: following the maiden drilling programme at Bibemi completed in April 2021, the Board determined that the results of that work justified a follow up campaign of further exploration drilling in order to move the project towards resource definition. Whilst mindful of difficult market conditions, the Board nevertheless determined that the value to be generated by drilling would outweigh the dilutionary impact of an equity raise, and that an equity raise was in the interests of shareholders. Consequently a £1.75m equity raise was executed in Autumn 2021 in order to ensure we could perform significant project advancement in the 2021/22 dry season in Cameroon. the Board takes seriously its ethical responsibilities to the communities and environment in which it works. We abide by the local and relevant UK laws on anti-corruption & bribery. Wherever possible, local communities are engaged in the geological operations and support functions required for field operations, providing much needed employment and wider economic benefits to the local communities. In addition, we follow international best practise on environmental aspects of our work. Our goal is to meet or exceed international standards, in order to ensure we obtain and maintain our social licence to operate from the communities with which we interact. The interests of our employees are a primary consideration for the Board. An inclusive share-option programme allows them to share in the future success of the Company, personal development opportunities are supported and a health and security support network is in place to assist with any issues that may arise on field expeditions or as a result of the Covid-19 pandemic. WWW.ORIOLERESOURCES.COM 25 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) At Oriole, ethical and responsible stakeholder engagement and protection of the environments in which we work is at the core of everything we do, ensuring that all parties benefit from our operations. In 2021, we went a step further by beginning to align ourselves with the United Nations’ Sustainable Development Goals. Of the 17 goals, Oriole has initially focussed on the following eight that we believe are most aligned with our core business and  with our responsibilities as a corporate citizen. Of the 17 goals, Oriole Resources has initially focused on the following eight Quality education Good health and well-being The health and well- being of our employees is of utmost importance. During the year, in addition to Covid-19 testing and Exploration and mining companies have always been at the forefront of upskilling the local population in what are often remote areas of the World where educational facilities are sometimes less well established. Operating in Cameroon, with its relatively embryonic mining industry, gives us exposure to this opportunity and we work closely with the local communities and universities to deliver on this. In fact, across all our operations, we source our employees in-country wherever possible and provide appropriate training at all levels to ensure everyone has an equal opportunity. During the year, the Company supported Cameroonian student Edith Yalda on her Masters’ project at the University of Ngoundéré. Edith’s project utilised diamond drill core from our Bibemi project to study the importance of magnetic susceptibility as a prospecting tool in orogenic gold systems. In November, management attended Edith’s thesis defence and the award of her degree; she is now a full-time employee with the Company. A number of precautionary measures such as the wearing of face other students, both in the UK and Cameroon, have also masks, the Company ran a voluntary Covid-19 vaccination been supported at various levels, from internships to BSc programme for its teams in Cameroon. A total of 23 and MSc projects. team members opted to receive the Johnson & Johnson one shot vaccine, as well as some members of the local community that requested it. During the pandemic, we also introduced hybrid working for our UK team, reducing exposure to potential Covid-19 transmission whilst ensuring the Group still operates effectively. In Cameroon, basic provisions such as a water well and a fridge for medical supplies might seem relatively small contributions, but they are meaningful to the communities in which we operate and can have a big impact on their health and well-being. Our local teams are empowered to bring forward suggestions that can improve lives and continue to build our social licence to operate. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT26 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONTINUED Gender equality Industry, Innovation & Infrastructure Diversity within a workforce brings wide-ranging Exploration and mining is at the front line of discovering benefits and can often be fundamental to a company’s the very resources that are critical to the delivery of success. Oriole promotes diversity throughout the Group, global infrastructure and technological advancements building its teams based on merit and not gender – and that are important to many of the sustainability or any other prejudice - and ensuring that everyone challenges facing the world today. Whilst we are has equal rights, responsibilities and opportunities. gold-focussed, during our exploration work we also Despite being a male-dominated industry, Oriole test for a wide range of other elements, including the strongly supports and empowers women in mining. The battery metals that are crucial to meeting the UN’s Company has female roles at all levels of the business, sustainability goals. The importance of gold in building from junior staff through to management, and has resilient infrastructure and promoting sustainable recently appointed two women to the Board. industrialisation is often overlooked and yet, due to its inherent properties, 11% of all gold produced is used in industry, with applications in medical, electronics, automotive, defence and aerospace industries, as well as climate-controlled buildings. Gold is also increasingly used as a catalyst in many industrial processes, and new research reported this year claims that gold holds the answer to reducing global greenhouse gas emissions by converting waste CO2 into jet fuel. At a more local level, we aim to support governmental sustainability programmes. In Senegal, through the option agreement with IAMGOLD, the Company provides annual contributions to the country’s Social Mining Programme, a fund dedicated to benefiting local communities, and an integral part of the Senegalese Mining Code. Decent work and economic growth Exploration, and the resultant mining operations, drive significant growth in developing economies and are associated with a multiplier effect at both a local and national level. Oriole is committed to providing all of its employees with fair incomes, job security and safe working conditions. We support the development of all our employees and aim to provide an environment which will attract, retain, and motivate people, helping them to maximise their potential and share in the Group’s successes. During the year, we expanded our core team to include six Cameroonian employees, bringing them on to full time contracts and giving them financial security by ensuring they are paid all year round, not just when the exploration programmes are running. We also trained and then employed technicians and casual workers from the local communities, which has had a significant positive impact both financially and in terms of upskilling the local workforce. WWW.ORIOLERESOURCES.COM 27 Reduced inequalities Partnerships for the Goals Oriole leads by example in the countries and Oriole has a diverse array of stakeholders and is communities in which it operates, by building diverse committed to understanding and meeting their needs. teams that do not discriminate on the basis of sex, age, In all the countries we operate, we have local partners disability, sexual orientation, race, class, ethnicity, or that help us to foster good relationships with local religion. Throughout the business, we fully embrace the communities and the local administration to ensure individuality of each and every one of our employees that our goals are aligned. We also use in-country and operate a zero-tolerance approach to anyone that suppliers wherever possible to support communities does not adhere to these values. Within the business, and local businesses. In Cameroon specifically, we our team of 19 employees are from four different have also continued to work closely with the Ministry counties, practise a number of different religions and of Mines, the UK Honorary Consul and the British High have ages ranging from 22 to over 65 years old. Commission, and strongly support the efforts they are making to attract foreign investment and promote the sustainable development of Cameroon. During the year we registered our interest in signing-up to the British High Commission’s sustainability goals for UK businesses in Cameroon that we understand will be launched during 2022. Life on Land The Company is committed to minimising any adverse impacts of its activities on the natural environment and, as a minimum standard, we comply with any relevant legislation and environmental regulations within the territories in which we operate. During all of our programmes, we ensure that we have a minimal impact on the environment by planning our programmes as efficiently as possible and we have protocols in place to ensure that all of our sites are rehabilitated before we move on. Where trenches have to remain open for sampling and logging purposes, measures are put in place to ensure the safety of animals and people in the area. During the year, our other efforts towards protecting the environment included building our Bibemi exploration camp out of up-cycled shipping containers, sourced locally in Cameroon, and installing solar panels to generate electricity for that camp. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT 28 CORPORATE GOVERNANCE The Chairman of the Board of Directors of Oriole Resources ° Applying the most appropriate cost-effective exploration PLC (‘Oriole’ or ‘the Company’ or’ the Group’ or ‘we/our’) has techniques in order to determine whether further work, a responsibility to ensure that Oriole has a sound corporate using increasingly expensive exploration techniques, is governance policy and an effective Board. justified; and The Board has adopted the Quoted Companies Alliance (‘QCA’) Corporate Governance Code. The QCA code identifies ten principles to be followed in order for companies to deliver growth in long-term shareholder value, encompassing effective management with regular and timely communication to shareholders. This report follows the structure of those principles and explains how we have ° Appreciating the likely realisation routes that will be available to us as the project moves towards development. Principle 2: Seek to understand and meet shareholder needs and expectations The Company is committed to engaging with its applied the guidance as well as disclosing any areas of non- shareholders to ensure that its strategy, operational results compliance. We will provide annual updates on our compliance with the QCA Corporate Governance Code. The Company notes that it does not comply with the QCA Corporate Governance Code as no Audit Committee Report has been prepared in this Annual Report. The Board has assessed that, having regard to the nature and current stage of development of the Company and its projects, it is not currently required for the Audit Committee to produce such a report for the Company to maintain its corporate governance and will continue to review this in the future. The sections below set out how the Group applies the ten principles of the QCA code and sets out areas of non-compliance. and financial performance are clearly understood. We aim to engage with our shareholders via roadshows, attending investor conferences and through our regular reporting on the London Stock Exchange. In 2021, due to the continuing Covid-19 restrictions, roadshows and investor conferences could not happen in their traditional format. Instead, we moved our engagement with shareholders on-line, running a number of seminars providing the opportunity for presentations followed by question and answer sessions. These seminars remain available for later viewing, and have proven an effective way of engaging with shareholders and potential investors. We also attended on-line investor conferences and as restrictions in the United Kingdom relaxed, have had face to face meetings with investors and There have been no significant governance changes during prospective investors. We actively encourage investors to the year. Principle 1: Establish a strategy and business model which promotes long-term value for shareholders The Company is a gold and base metals exploration specialist, with operations in Africa and Turkey. Our goal is to deliver long term value for our shareholders. We aim to do this by identifying good quality grassroots and early-stage exploration projects. Consequently we: ° use our expertise to identify those areas with economically feasible deposits, ° assess the business environment of the target country and its attractiveness for prospecting and eventual mining operation, submit questions, primarily via our website, and seek to answer those questions received within the restrictions placed on us by AIM. LSE announcements include details of the website, Twitter page and phone numbers to contact the Company and its professional advisors. Private shareholders The AGM is the main forum for dialogue with retail shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. During 2021, the AGM was conducted remotely in line with UK Government guidance. Question and answer sessions were scheduled for a week before the meetings, in order to let Shareholders ask questions in advance of submitting proxy votes. For each vote, the number of proxy ° understand existing interests in a licence area in order votes received for, against and withheld is announced at to ensure we can earn-in to existing interests on terms the meeting. The results of the AGM are announced via favourable to our shareholders. Early stage mineral exploration is by its nature speculative and we aim to reduce the risks inherent in the industry by the London Stock Exchange. Investors can contact us via our website (https://www.orioleresources.com) or by email (info@oriolereources.co.uk). careful application of funds throughout individual projects. Retail shareholders also regularly attend our seminar We do that by: ° Reviewing existing exploration data; ° Establishing close in-country partnerships for our projects; presentations and we publicise our attendance via LSE announcements and Twitter. In addition, our up to date Corporate presentation is made available on our website. WWW.ORIOLERESOURCES.COM 29 Institutional shareholders The Directors actively seek to build a relationship with Local partners and communities Our operations provide employment in remote areas institutional shareholders. Shareholder relations are of developing countries. Essential to our success is managed primarily by the Chief Executive Officer and the establishment of close working relationships with Chief Financial Officer. The Chief Executive Officer and local partners. We seek local partners who have a good Chief Financial Officer make presentations to institutional understanding of the local exploration and mining shareholders and analysts throughout the year, both in industry and regulations within their country, and with the virtual forums and where possible, in person in London capacity and capability to assist with the management and and Cape Town, through events such as Mines and Money maintenance of the project. and 121 Group. We also have ad-hoc meetings with our shareholders via conference call and email. The Board as a whole is kept informed of the views and concerns of major shareholders by the Chief Executive Officer. Any significant investment reports from analysts are also circulated to the Board. The Non-Executive Chair and Non-Executive Director are available to meet with major shareholders if required to discuss issues of importance to them and are considered to be Independent from the executive management of the Company. Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term success. Aside from our shareholders, our most important stakeholder groups are our employees, local partners and those local communities that may be impacted by our exploration activities. The Board is regularly updated on stakeholder issues and their potential impact on our business to enable the Board to understand and consider these issues in decision-making. The Board understands that maintaining the support of all its stakeholders is paramount for the long- term success of the Company. Employees We maintain only a small permanent staff across the UK, Africa and Turkey and as such, employee engagement with the Executive Directors is frequent with scheduled weekly team calls as well as daily conference calls and discussions. We aim to provide an environment which will attract, retain and motivate our team and monitor the effectiveness by We are mindful of our obligations to the local environment and operate to high levels of health and safety in respect of both our local workers and the local community. Employee training focuses on operating safely and considerately in these communities. Engagement with local communities is dependent on jurisdiction and the stage of exploration but is typically by public forum or with local or regional leaders, including site visits and workshops. Social projects in the local communities are dependent on local need and also the stage of exploration/level of project investment. Examples of our previous social projects include drilling new boreholes for drinking water, provision of medical clinics, supply of equipment to a local school and building a new road. As projects move forward, towards potential mining activities, we seek to bring in partners who can credibly make the investments to move towards mine production. In doing so we have regard for their ability and desire to move projects forward, their industry reputation and their commitment to treating the local communities fairly and protecting the environment. We enter agreements that allow us to monitor their activities and have monthly updates on project progress. Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation Audit, risk and internal control Financial controls The Company has an established framework of internal regular one-on-one discussions and an annual appraisal financial controls, the effectiveness of which is regularly system. We have an employee handbook in order to provide reviewed by the Executive Management, the Audit a comprehensive document detailing all the policies and Committee and the Board. The key financial controls are: procedures covering all aspects of employment with Oriole Resources PLC. Our key value underpinning the Employee Handbook is to treat all employees fairly and equally and to promote ethical behaviour, diversity and non-discrimination. Relevant, cost-effective training courses are available to all employees and are discussed during the annual appraisal process. ° The Board is responsible for reviewing and approving overall Company strategy, approving new exploration projects and budgets, and for determining the financial structure of the Company including treasury, tax and dividend policy. Monthly results and variances from plans and forecasts are reported to the Board; ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT30 CORPORATE GOVERNANCE CONTINUED ° The Audit Committee, comprising the Non-Executive The Group reviews at least annually the effectiveness of Directors, assists the Board in discharging its duties its system of internal control, whilst also having regard to regarding the financial statements, accounting policies its size and the resources available. As part of the Group’s and the maintenance of proper internal business, and plans we continue to review a number of non-financial operational and financial controls; controls covering areas such as regulatory compliance, ° Regular budgeting and forecasting is performed to monitor the Company’s ongoing cash requirements and cash flow forecasts are circulated to the Board on a monthly basis; ° Actual results are reported against budget and prior year and are circulated to the Board; ° The Company has an investment appraisal system that considers expected costs against a range of potential outcomes arising from the exploration opportunities that we are invited to participate in; ° Regular reviews of exploration results are performed as the basis for decisions regarding future expenditure commitments; business integrity, health and safety, and corporate social responsibility. All employees are aware of their obligations under anti-bribery and corruption legislation and detailed information is provided in the Employee Handbook. In addition, whistle-blowing procedures have been established and publicised to all employees. Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair The Board comprises a Non-Executive Chair, three Executive Directors and one Non-Executive Director. All current Directors were appointed during or since 2018, as part of a full Board refresh. John McGloin served as Independent ° Due to the international nature of the business there are, Non-Executive Chairman, but resigned on 17 February 2022, at times, significant foreign exchange rate movement to be replaced by Eileen Carr at that date. David Pelham exposures. Cash flow forecasting is done at the ‘required serves as an independent Non-Executive Director. Both currency’ level and foreign currency balances are the Non-Executive Directors have extensive experience in maintained to meet expected requirements; and the mining industry and have considerable experience of ° For exploration projects, we manage the risk of failure to find economic deposits by low cost early stage exploration techniques, with detailed analysis of results. Moving projects to more expensive exploration techniques requires a rigorous review of results data prior to deciding whether to proceed with further work. Non-financial controls The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group’s internal control system include: serving on the Board of public companies. Given the current board structure, the Company has not designated a Senior Independent Director. The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company and industry on the other, to enable it to discharge its duties and responsibilities effectively. The Nomination Committee keeps the need for an additional Non-Executive Director under regular review. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The Company has issued options to all Directors including the Non-Executive Directors under a Director share option remuneration plan (the ‘Plan’), enacted to maximise funds available for exploration by conserving cash, by granting ° Close management of the day-to-day activities of the options in lieu of contractual salary payments for a limited Group by the Executive Directors; term during 2019 and 2020. In this regard, options are ° An organisational structure with defined levels of responsibility, which promotes entrepreneurial decision- making and rapid implementation while minimising risks; and ° Central control over key areas such as capital expenditure authorisation and banking facilities. preferable to the issue of full-paid shares, as the tax deferral that options provide allows more cash conservation in the Company. The grant of options to the Non-Executive Directors is not considered to be part of any incentive plan nor to impair their independence. WWW.ORIOLERESOURCES.COM 31 The Board aim to meet at least monthly. The agenda is set by the Company Secretary in consultation with the Chairman and CEO. The standard agenda points include: ° Review of previous meeting minutes and actions arising therefrom; Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities The Board is satisfied that, between the Directors, it has an ° A report by the Executive Director, Exploration & Business effective and appropriate balance of skills and experience, Development, covering all operational matters; ° A report from the CFO covering all financial matters; ° Any other business including update of Register of Conflicts. Directors’ conflict of interest The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of particularly so in the area of gold and base metal exploration and development. Biographies of the Directors are available on the company website, www.orioleresources.com. All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings by the Company Secretary. Contracts are available for inspection at the Company’s registered office and at the the other commitments and interests of its Directors, and Annual General Meeting (“AGM”). changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. A Register of Conflicts is maintained and is a standard agenda item at each Board Meeting. The Board has access to the Company’s nominated adviser, its brokers and its lawyers. The advisers do not typically provide materials for Board New Directors are selected having regards to the Company’s needs for a balance of operational, industry, legal and financial skills. Experience of the Mining industry and in particular the exploration sector is important but not critical, as is experience of running a public company. meetings except if requested to do so for the purposes of In accordance with the Company’s Articles of Association, discussing upcoming regulations and other issues. only the Non-Executive Directors are subject to the Board meetings are deemed quorate if two Board members requirement to retire by rotation. are present and providing 7 days’ notice of such meeting has been given and waived by the non-attending Directors. Appointment, removal and re-election of Directors The Board have established a Nominations Committee, During 2021, Board Meetings were held both remotely using comprising the Non-Executive Directors, to consider the video conference facilities, and face to face wherever possible. need for further Board appointments, and to identify suitable Directors and Officers Liability insurance is maintained for all Directors and key employees. The table below sets out the attendance statistics for all current Board members through 2021: Meetings held during the year or since date of appointment Meetings attended candidates for recommendation to the Board. The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require that one-third of the Non-Executive Directors must stand for re-election by shareholders annually in rotation and that any new Directors appointed during the year must stand for re-election at the AGM immediately following their appointment. Tim Livesey Bob Smeeton Claire Bay (appointed 12 July 2021) John McGloin David Pelham 11 11 5 11 11 11 11 5 11 11 Independent advice All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense from lawyers, the nominated adviser, brokers and other professional advisors that they deem relevant. In addition, the Directors have direct access to the advice and services of the Company Secretary and Chief Financial Officer, who, due to the size of the Company, are currently the same individual. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT32 CORPORATE GOVERNANCE CONTINUED Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement The Board of Directors was fully refreshed in 2018, and has since been added to. During 2019 the Board adopted a policy to evaluate the Board’s performance based on clear and relevant objectives, seeking continuous improvement. The clear and relevant objectives that the Board has identified are as follows: ° suitability of experience and input to the Board; ° knowledge of Corporate Governance matters including Environmental Social Governance (‘ESG’); and meetings serve to refresh and re-iterate the Company’s ethical standards as they apply to the operational issues that are discussed on that call. Principle 9: Maintain governance structures and processes that are f it for purpose and support good decision-making by the Board Board programme The Board aims to meet approximately monthly and as and when required, and has regular update calls. The Board sets direction for the Company through a formal schedule of matters reserved for its decision. During the year to December 2021 the Board met for eleven scheduled ° attendance at Board and committee meetings; and meetings. The Board and its Committees receive appropriate ° interaction with management in relevant areas of expertise to ensure insightful input into the Company’s business. The Board recognises the importance of formally reviewing on a regular basis the effectiveness of its performances as a unit, as well as that of its committees and the individual directors, based against the criteria set out above. During the year the Board carried out a Board Effectiveness Review, held internally but based on guidelines available from the Quoted Company Alliance. The review led to a number of other actions, including: and timely information prior to each meeting; a formal agenda is produced for each meeting and Board and Committee papers are distributed by the Company Secretary several days before meetings take place. Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant Committee and are then followed up by the ° Establishment of ESG as a regular Board agenda item, and Company’s management. formalisation of our reporting around ESG matters; ° A full review of risks across the Group; Roles of the Board, Chair and Chief Executive Officer The Board is responsible for the long-term success of the ° Establishment of a Nominations Committee; Company. There is a formal schedule of matters reserved ° Holding of a ‘refresher’ briefing on Director’s Responsibilities, provided by our professional advisors. This review is to be performed annually, and actions arising are monitored on a regular basis at Board Meetings. This ongoing process will include development or mentoring needs of individual directors or the wider senior management team, and identify any succession planning issues and put in place processes to provide for succession planning. Principle 8: Promote a culture that is based on ethical values and behaviours The Board aims to lead by example and do what is in the best interests of the Company. We operate in remote and under- developed areas and ensure our employees understand their to the Board. It is responsible for overall Group strategy; approval of exploration projects; approval of the annual and interim results; annual budgets; dividend policy; and Board structure. It monitors the exposure to key business risks. There is a clear division of responsibility at the head of the Company. The Chair is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction. The CEO is responsible for proposing the strategic focus to the Board, implementing it once it has been approved and overseeing the management of the Company. The CEO, together with the other Executive Directors and other senior employees, are responsible for establishing and enforcing systems and controls, and liaison with external advisors. The CEO has responsibility for communicating with shareholders, assisted by the other Executive Directors. obligations towards the environment and in respect of anti- All Directors receive regular and timely information on the bribery and corruption. Details of the Company’s values are set out in the Employee Handbook that was published to all employees during 2018. This document brings together various policies that have been distributed to all employees previously. Regular calls Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. The Board reviews the update on performance and any significant variances are reviewed at each meeting. WWW.ORIOLERESOURCES.COM 33 Board committees The Board is supported by the Audit, Remuneration and Nomination committees. Each committee has access to such resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties. The three committees comprise the Non-Executive Directors. Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year results The Audit Committee provides a formal review of the announcements, the AGM and one-to-one meetings with effectiveness of the internal control systems, the Group’s large existing or potential new shareholders. The Company financial reports and results announcements and the regularly posts regulatory announcements covering external audit process. The Committee meets twice per year operational and corporate matters, such as drilling results to review the published financial information and to meet and significant changes in ownership positions across with the Auditors. Notable work undertaken during 2021 by the Audit Committee included meeting with the Company’s independent auditor in connection with the audit of the Group financial statements for the year ended 31 December 2020. The formal audit sign off meeting, held in March 2021, historic projects in which it still retains an investment. A range of corporate information (including all Company announcements and a corporate presentation) is also available to shareholders, investors and the public on the Company’s corporate website, www.orioleresources.com and also on its Twitter feed @OrioleResources. covered the following significant matters: The Board receives regular updates on the views of shareholders through briefings and reports from Investor Relations, the CEO, CFO and the Company’s brokers. The Company communicates with institutional investors frequently through briefings with management. In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views. This Strategic Report was approved by the Board of Directors on 8 March 2022. Tim Livesey Chief Executive Officer ° A confirmation of the materiality levels used by the Auditor’s in the performance of their duties, ° Confirmation to the Auditors of the Boards view of: − − The appropriateness of the use of the going concern principle in drawing up the financial statements; The appropriateness of the judgments and estimates made to support items disclosed in note 4 to the financial statements (‘Critical Accounting Estimates and Judgements’), and − The review for impairment of the assets of the Company. ° A discussion of the Auditors findings on internal controls and unadjusted errors; ° A review of the matters included in the Auditor’s requested Management Representations Letter. The conclusion of the meeting was that there were no material matters arising. The Audit Committee has not provided a separate report on its activities. The Remuneration Committee provides a formal and transparent review of the remuneration of the Executive Directors and senior employees and makes recommendations to the Board on individual remuneration packages. The Committee met once during the year. The Remuneration Committee has produced a report on its activities as set out on pages 34. The Nomination Committee had its terms of reference established in June 2021, and met once during the year. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT34 REPORT OF THE REMUNERATION COMMITTEE The Remuneration Committee of the Board is responsible The Board recognises that the remuneration of Directors for providing recommendations to the Board on matters (both Executive and Non-Executive) and senior management including the composition of the Board and competencies of is of legitimate concern to shareholders and is committed to directors, the appointment of directors, the performance of following current best practice. The Group operates within the executive directors and senior management, and making a competitive environment and its performance depends recommendations to the Board on matters relating to their upon the individual contributions of the Directors and remuneration and terms of employment. senior management. Throughout the year, the Company The committee will also make recommendations to the Board on proposals for the granting of annual bonuses, shares awards and other equity incentives pursuant to any share award scheme or equity incentive scheme in operation from time to time. The remuneration and nominations committee meet at least once a year. The members of the paid remuneration to Directors and senior management in accordance with Contracts for Services (in respect of Non- Executive directors) and Service Agreements (in respect of officers and senior management). No annual bonuses, share options or other long-term incentives have been awarded to any of the Directors during the period under review. committee during 2021 were John McGloin (chair of the Details of Director’s shareholdings and are set out on committee) and David Pelham. Following the resignation page 39 and interests in share options are set out on of John McGloin as a director of the Company, he has page 35. Whilst the Company has no formal shareholding stepped down and Eileen Carr will take over as Chair of the requirement, the Directors have collectively participated Remuneration Committee. The policy of the Board is to provide remuneration packages designed to attract, motivate and retain personnel of the calibre necessary to maintain the Group’s position and to reward them for enhancing shareholder value and return. It aims to provide sufficient levels of remuneration to do this, but to avoid paying more than is necessary. Remuneration packages also reflect levels of responsibilities and contain incentives to deliver the Group’s objectives. in fund raisings, acquired shares on the open market, and accepted share options in lieu of salary. The Committee considers that, because the Company regularly raises equity finance to progress its exploration projects, a formal shareholding policy requirement would potentially be detrimental to the interests of the Company, as decisions on financing need to be made based solely on the interests of the Company. The Remuneration Committee have considered whether, and are satisfied that, the Executive Directors have sufficient exposure to the equity of the Company to satisfactorily align their interests with the interests of shareholders. Remuneration paid to the Directors is set out below: 2021 Tim Livesey Robert Smeeton Claire Bay (appointed 12 July 2021) John McGloin David Pelham Total 2020 Tim Livesey Robert Smeeton John McGloin David Pelham Total Salaries and other short-term benefits Post employment benefits Salary £ 150,000 120,000 43,065 36,000 28,000 377,065 Taxable benefits £ 3,157 – 20 – – Pension £ 4,500 3,600 1,292 – – Share based payments £ 2,988 2,648 652 – – Total £ 160,645 126,248 45,029 36,000 28,000 3,177 9,392 6,288 395,922 Salaries and other short-term benefits Post employment benefits Salary £ 101,250 85,000 27,600 21,464 235,314 Taxable benefits £ 2,752 – – – Pension £ 3,038 2,550 – – Share based payments £ 49,101 39,516 11,496 8,771 2,752 5,588 108,884 Total £ 156,141 127,066 39,096 30,235 352,538 WWW.ORIOLERESOURCES.COM 35 Details of share options held by Directors over the ordinary shares of the Company are set out below. The market price of the Company’s shares at the end of the financial year was 0.345p per 0.1p share (2020: 0.43p) and the range of market prices during the year was between 0.335p and 1.71p. Director Tim Livesey Tim Livesey Tim Livesey Tim Livesey Tim Livesey Tim Livesey Tim Livesey Tim Livesey Tim Livesey Tim Livesey Robert Smeeton Robert Smeeton Robert Smeeton Robert Smeeton Robert Smeeton Robert Smeeton Robert Smeeton Robert Smeeton Robert Smeeton Robert Smeeton Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* Claire Bay* John McGloin David Pelham At 1/1/21 Granted At 31/12/21 Exercise Price (p) Issue Date Vesting Date 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 17,979,940 2,000,000 2,000,000 2,000,000 666,666 666,667 666,667 2,000,000 2,000,000 2,000,000 14,383,952 2,000,000 2,000,000 2,000,000 10,000 10,000 10,000 50,000 50,000 50,000 50,000 50,000 50,000 1,166,667 1,166,667 1,166,666 1,000,000 1,000,000 1,000,000 4,230,574 3,290,446 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 17,979,940 2,000,000 2,000,000 2,000,000 666,666 666,667 666,667 2,000,000 2,000,000 2,000,000 14,383,952 2,000,000 2,000,000 2,000,000 10,000 10,000 10,000 50,000 50,000 50,000 50,000 50,000 50,000 1,166,667 1,166,667 1,166,666 1,000,000 1,000,000 1,000,000 4,230,574 3,290,446 0.90 0.90 0.90 0.37 0.37 0.37 0.10 0.37 0.37 0.37 0.62 0.62 0.62 0.37 0.37 0.37 0.10 0.37 0.37 0.37 2.70 2.70 2.70 1.50 1.50 1.50 2.00 2.00 2.00 0.37 0.37 0.37 0.37 0.37 0.37 0.10 0.10 1/3/18 1/3/18 1/3/18 19/3/19 19/3/19 19/3/19 19/8/20 22/12/20 22/12/20 22/12/20 4/6/18 4/6/18 4/6/18 19/3/19 19/3/19 19/3/19 19/8/20 22/12/20 22/12/20 22/12/20 5/12/14 5/12/14 5/12/14 4/6/15 4/6/15 4/6/15 2/9/16 2/9/16 2/9/16 19/3/19 19/3/19 19/3/19 22/12/20 22/12/20 22/12/20 19/8/20 19/8/20 1/3/19 1/3/20 1/3/21 19/3/20 19/3/21 19/3/22 19/8/20 1/1/21 1/1/22 1/1/23 4/6/19 4/6/20 4/6/21 19/3/20 19/3/21 19/3/22 19/8/20 1/1/21 1/1/22 1/1/23 5/12/15 5/12/16 5/12/17 4/6/16 4/6/17 4/6/18 2/9/17 2/9/18 2/9/19 19/3/20 19/3/21 19/3/22 1/1/21 1/1/22 1/1/23 19/8/20 19/8/20 * Claire Bay held these options as an employee and they are now disclosed here following her appointment to the Board of Directors on 12 July 2021. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT36 REPORT OF THE REMUNERATION COMMITTEE CONTINUED Three of the Directors participated in the fund raise that completed on 27 October 2020, and as a consequence received warrants to purchase ordinary shares on the same terms as the other investors in that fund raise. Details of these warrants are set out in the table below: Director Tim Livesey Robert Smeeton John McGloin At 1/1/21 735,294 735,294 Exercised (735,294) (735,294) 2,205,882 (2,205,882) At 31/12/21 Exercise Price (p) Issue Date Vesting Date – – – 0.68 0.68 0.68 27/10/20 27/10/20 27/10/20 27/10/20 27/10/20 27/10/20 The three Directors above exercised the warrants on 25 January 2021 at the exercise price of 0.68p. All three Directors continue to hold the shares so acquired. In compliance with the Pensions Act 2008 the Company has established a Workplace Pension Scheme for its UK based Directors and employees. The Executive Directors and employees are members of the scheme and contributions are in line with the statutorily prescribed minimum contributions for employees and employers. The Non-Executive Directors have individually elected to opt-out of the Workplace Pension Scheme. Report approved on behalf of the Remuneration Committee on 8 March 2022, by Eileen Carr Chairman WWW.ORIOLERESOURCES.COM ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021 37 I S T R A T E G C R E P O R T 38 DIRECTORS’ REPORT Oriole Resources PLC Company number: 05601091 The Directors present their report, together with the ° prepare the Financial Statements on a going concern basis Financial Statements and auditor’s report, for the year ended unless it is inappropriate to presume that the Group and 31 December 2021. Company will continue in business. General Information Certain information required by the Companies Act 2006 relating to the information to be provided in the Directors’ Report is set out in the Group Strategic Report and includes: principal activities, future developments and principal risks and uncertainties. Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with The Directors confirm that they have complied with the above requirements in preparing the Financial Statements. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. applicable law and regulations. Under that law the Directors The maintenance and integrity of the website is the have prepared the Group and Parent Company Financial responsibility of the Directors. The work carried out by the Statements in accordance with UK-adopted international auditors does not involve consideration of these matters accounting standards and, as regards the Parent Company and, accordingly, the auditors accept no responsibility for Financial Statements, as applied in accordance with the any changes that may have occurred to the information Companies Act 2006. Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and Group as at the end of the financial year and of the profit and loss of the Group for that period. In preparing these Financial Statements, the Directors are required to: ° select suitable accounting policies and then apply them consistently; ° make judgements and accounting estimates that are reasonable and prudent; ° state whether the Financial Statements comply with UK- adopted international accounting standards , subject to any material departures disclosed and explained in the Financial Statements; and contained in the Financial Statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of the Financial Statements and other information included in annual reports may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26 regarding the Company’s website. Substantial shareholdings As at 15 January 2022, the Company had not been informed of any holdings of 3% or more in the Company’s issued share capital. WWW.ORIOLERESOURCES.COM 39 Directors and their interests The current Directors are listed on page 3. In compliance with the Company’s Articles of Association, David Pelham, will retire and, being eligible, offer himself for re-election at the forthcoming Annual General Meeting. Those Directors serving at the end of the year, or at the date of this report, had beneficial interests in the issued share capital and share options of the Company as follows: Tim Livesey Robert Smeeton Claire Bay John McGloin David Pelham Total As at 31 December 2021 As at 31 December 2020 Ordinary Shares Share Warrants Share Options Ordinary Shares Share Warrants Share Options 11,559,132 8,131,150 765,392 6,617,647 1,653,987 28,727,308 – – – – – – 35,979,940 7,785,857 735,294 35,979,940 28,383,952 5,042,915 735,294 28,383,952 6,830,000 294,804 – 6,830,000 4,230,574 4,411,765 2,205,882 4,230,574 3,290,446 948,105 – 3,290,446 78,714,912 18,483,446 3,676,470 78,714,912 Provision of information to Auditor The Directors who held office at the date of this report Events after the Reporting Period On 17 February 2022, Eileen Carr was appointed as confirm that, so far as they are individually aware, there is no Non-Executive Chair of the company, following the relevant audit information of which the Company’s auditors retirement of John McGloin. are unaware and the Directors have taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. Going Concern The Company raises money for exploration and capital projects as required. There can be no assurance that the Group’s projects will be developed in accordance with the On 21 February 2022, the Company announced that is had been notified by IAMGOLD that it had met the $4 million commitment to exercise its first option on the Senala licence and move to a 51% ownership position. Auditor PKF Littlejohn LLP has signified its willingness to continue in office as auditor. current plans. Future work on these projects, the levels of Approved by the Board on 8 March 2022 and signed on production and the financial returns arising there from, may its behalf. be adversely affected by factors (e.g. Covid-19) outside of the control of the Group. R J Smeeton Company Secretary Notwithstanding the loss incurred during the year under review, the Directors have a reasonable expectation that the Group will have sufficient access to funds to provide adequate resources to continue in operational existence for the foreseeable future being a period of 12 months from the date of signing of these financial statements. The Group has therefore continued to adopt the going concern basis in preparing the Annual Report and Financial Statements. Further details on Directors assumptions and conclusions thereon are included in the statement on going concern in note 2 to the Financial Statements. The auditors have made reference to going concern by way of a material uncertainty within their audit report. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021STRATEGIC REPORT40 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ORIOLE RESOURCES PLC Opinion We have audited the financial statements of Oriole Resources Plc (the ‘parent company’) and its subsidiaries Material uncertainty related to going concern We draw attention to note 2.1 in the financial statements, (the ‘group’) for the year ended 31 December 2021 which which indicates that further funding will be required within comprise the Statement of Consolidated Comprehensive the 12 months following the date of approval of the financial Income, the Statement of Consolidated and Parent Company statements in order to meet working capital needs and to Financial Position, the Statement of Consolidated and Parent fund further exploration programmes. As stated in note Company Changes in Equity, the Statement of Consolidated 2.1, these events or conditions indicate that a material and Parent Company Cash Flows and the notes to the uncertainty exists that may cast significant doubt on the financial statements, including a summary of significant company’s ability to continue as a going concern. Our accounting policies. The financial reporting framework that opinion is not modified in respect of this matter. has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. In our opinion: ° the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2021 and of the group’s loss for the year then ended; ° the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards ° the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and ° the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included obtaining management’s assessment of going concern and associated cash flow forecasts for 12 months from the date of approval of the financial statements. We have reviewed the inputs to the cash flow forecast for reasonableness, compared to historic financial information, and stress-tested where appropriate. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Our application of materiality Group materiality 2021 Group materiality 2020 Basis for materiality £315k £320k 2.5% of net assets The calculated level of materiality is broadly similar to the prior year as net assets have remained broadly unchanged year on year. Standards on Auditing (UK) (ISAs (UK)) and applicable law. We consider net assets to be the most significant Our responsibilities under those standards are further determinant of the group’s financial position and described in the Auditor’s responsibilities for the audit performance used by shareholders, with the key financial of the financial statements section of our report. We statement balances being exploration and evaluation assets, are independent of the group and parent company in investment in associate and cash. accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Whilst materiality for the financial statements as a whole was set at £315k, significant components of the group were audited to a level of materiality ranging between £135k - £235k. Performance materiality for the group and components was set at 75% (2020: 70%) to ensure sufficient coverage of key balances. We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. At the planning stage materiality is used to determine the financial statement areas that are included within the scope of our audit and the extent of sample sizes during the audit. WWW.ORIOLERESOURCES.COM 41 We agreed with the audit committee that we would report The audits of significant components was performed in to the committee all individual audit differences identified London, conducted by PKF Littlejohn LLP using a team with during the course of our audit in excess of £16k (2020: £16k). specific experience of auditing mineral exploration entities There were no misstatements identified during the course of and publicly listed entities. our audit that were individually, or in aggregate, considered to be material. Our approach to the audit Our work scope included audit procedures to address the key audit matters, being the capitalisation and impairment of exploration and evaluation expenditure, and the valuation of investments and intercompany receivables. Our group audit scope focused on the principal areas of operation being: Key audit matters ° West Africa - the Senala gold project (Senegal); Key audit matters are those matters that, in our professional ° East Africa through its investment in associate, Thani Stratex Resources Limited, and equity investment in Thani Stratex Djibouti, the Hodine concession (Egypt) and the Pandora project (Djibouti); and ° Cameroon - exploration on Bibemi & Wapouzé projects and the Central licenses. Together with the parent Company and its group consolidation, which was also subject to a full scope audit, these represent the financially significant components of the  group. judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section we have determined the matters described below to be the key audit matters to be communicated in our report. Key Audit Matter How our scope addressed this matter Capitalisation and impairment of exploration and Our work included the following: evaluation expenditure under IFRS 6 Group & Company There is a risk that the carrying values of the group’s ° Substantive testing of a sample of exploration and evaluation expenditures to assess their eligibility for capitalisation under IFRS 6; exploration assets are not fully recoverable and should be ° Obtaining valid exploration licences and relevant impaired in line with IFRS 6. The group is engaged in various exploration projects, predominantly in Cameroon and Senegal (through Stratex EMC). The Directors use their judgement to assess whether the projects require an impairment and therefore this gives rise to a significant risk. This risk also relates to the appropriate capitalisation of exploration costs in accordance with IFRS 6. Related disclosures are included in Note 4 and Note 12 to the financial statements. agreements relating to project partnerships and reviewing key terms to ensure compliance; ° Making enquiries of management regarding future plans for each project including obtaining cashflow projections where necessary and corroborating to minimum spend requirements attached to licences, where appropriate; ° Considering whether there are indications of impairment on a project by project basis in accordance with IFRS 6; and ° Reviewing management’s impairment paper in respect of the carrying value of intangible assets and providing challenge, corroborating any key assumptions used. We consider Management’s assessment of impairment is reasonable in concluding no impairment is required to be recognised at year-end. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS42 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ORIOLE RESOURCES PLC - CONTINUED Key Audit Matter How our scope addressed this matter Valuation of investments in associates and subsidiaries Our work included the following: (including intercompany receivables) Group & Company There is a risk of material misstatement regarding the recoverability of investments in associates, subsidiaries ° Reviewing the value of investment balances against the value of the underlying assets, including reference to work performed in respect of the carrying value of exploration expenditure in accordance with IFRS 6; (including intercompany receivables i.e. the net investment ° Obtaining evidence of ownership for all investments held in each subsidiary) and other equity investments. within the group; and The carrying value of investments is ultimately dependent on the value of the underlying assets. Many of the underlying assets are exploration projects which are at an early stage of exploration making it difficult to definitively determine their value. Valuations for these sites are therefore based on judgments and estimates made by the Directors, which leads to a risk of misstatement. ° Reviewing management’s impairment paper in respect of the recoverability of investment balances (including intragroup receivables at the parent level) and providing appropriate challenge, corroborating any key assumptions used. We consider Management’s assessment of impairment is reasonable in concluding no impairment is required to be Similar considerations apply to the recoverability of loans to recognised at year end. group undertakings disclosed as investments. Related disclosures are included in Note 4, Note 11 , Note 14 and Note 15 to the financial statements. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course the other information contained within the annual report. of the audit: ° the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and ° the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. WWW.ORIOLERESOURCES.COM 43 Matters on which we are required to report by exception In the light of the knowledge and understanding of the Auditor’s responsibilities for the audit of the f inancial statements Our objectives are to obtain reasonable assurance about group and the parent company and their environment whether the financial statements as a whole are free from obtained in the course of the audit, we have not identified material misstatement, whether due to fraud or error, material misstatements in the strategic report or the and to issue an auditor’s report that includes our opinion. directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: ° adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or ° the parent company financial statements are not in agreement with the accounting records and returns; or ° certain disclosures of directors’ remuneration specified by law are not made; or Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non- compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including ° we have not received all the information and explanations fraud. The extent to which our procedures are capable of we require for our audit. detecting irregularities, including fraud is detailed below: Responsibilities of directors As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true ° We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through detailed discussions with management about and and fair view, and for such internal control as the directors potential instances of non compliance with laws and determine is necessary to enable the preparation of financial regulations both in the UK and in overseas subsidiaries. We statements that are free from material misstatement, whether due to fraud or error. also selected a specific audit team based on experience with auditing entities within this industry of a similar size. In preparing the group and parent company financial ° We determined the principal laws and regulations relevant statements, the directors are responsible for assessing the to the group and parent company in this regard to be group’s and the parent company’s ability to continue as a those arising from: going concern, disclosing, as applicable, matters related − Companies Act 2006 to going concern and using the going concern basis of − AIM Rules accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have − − Local industry regulations in Senegal and Cameroon Local tax and employment law no realistic alternative but to do so. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS44 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ORIOLE RESOURCES PLC - CONTINUED ° We designed our audit procedures to ensure the audit This risk increases the more that compliance with a law or team considered whether there were any indications of regulation is removed from the events and transactions non-compliance by the group and parent company with reflected in the financial statements, as we will be less likely those laws and regulations. These procedures included, to become aware of instances of non-compliance. The risk is but were not limited to: − Making enquiries of management − A review of Board minutes − A review of legal ledger accounts − A review of RNS announcements ° We also identified the risks of material misstatement of the financial statements due to fraud. Aside from the non-rebuttable presumption of a risk of fraud arising from management override of controls, we did not identify any significant fraud risks. ° As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: testing over all journals on a risk based approach to identify any unusual transactions that could be indicative of fraud; reviewing accounting estimates for evidence of bias; evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business; and reviewing transactions through the bank statements to identify potentially large or unusual transactions that do not appear to be in line with our understanding of business operations. also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. David Thompson (Senior Statutory Auditor) 15 Westferry Circus Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including For and on behalf of PKF Littlejohn LLP Canary Wharf Statutory Auditor London E14 4HD those leading to a material misstatement in the financial 8 March 2022 statements or non-compliance with regulation. WWW.ORIOLERESOURCES.COM STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME 45 Continuing operations Revenue Administration expenses Other (losses)/profits Operating loss Share of losses of associates Loss on change of ownership interest Loss before income tax Income tax credit Loss for the year Other comprehensive income for the year Items that may be subsequently reclassified to profit or loss Exchange differences on translating foreign operations Other comprehensive income for the year, net of tax Total comprehensive income for the year Loss for the year attributable to: Owners of the Parent Company Non-controlling interests Loss for the year Total comprehensive income for the year attributable to: Owners of the Parent Company Non-controlling interests Total comprehensive income for the year Year ended 31 December 2021 £’000 Year ended 31 December 2020 £’000 Notes 8 7 14 6 10 24 – (1,083) (361) (1,444) (30) (133) (1,607) 38 (1,569) 44 44 (1,525) (1,687) 118 (1,569) (1,643) 118 (1,525) – (1,018) 682 (336) (69) (63) (468) 148 (320) (50) (50) (370) (278) (42) (320) (328) (42) (370) Earnings per share for losses from continuing operations attributable to the owners of the Company (expressed in pence per share) - basic and diluted 21 (0.10) (0.03) The notes on pages 52 to 75 form part of these financial statements. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS 46 STATEMENT OF CONSOLIDATED FINANCIAL POSITION Company number: 05601091 ASSETS Non-Current Assets Property, plant and equipment Intangible assets Investments in equity-accounted associates Financial assets at fair value through other comprehensive income Trade and other receivables Deferred tax asset Current Assets Trade and other receivables Cash and cash equivalents Total Assets EQUITY Capital and reserves attributable to owners of the Company Share capital Share premium Other reserves Retained earnings Total equity attributable to owners of the Company Non-controlling interest Total equity LIABILITIES Non-Current Liabilities Employee termination benefits Current Liabilities Trade and other payables Total Liabilities Total Equity and Liabilities As at 31 December 2021 £’000 As at 31 December 2020 £’000 Notes 13 12 14 15 16 17 16 18 20 20 23 24 25 48 9,376 1,449 395 394 – 61 7,771 1,449 395 389 14 11,662 10,079 137 1,361 1,498 13,160 6,200 24,758 1,606 (19,838) 12,726 (133) 12,593 22 545 567 139 1,751 1,890 11,969 5,667 22,862 1,591 (18,187) 11,933 (251) 11,682 3 284 287 13,160 11,969 The notes on pages 52 to 75 form part of these financial statements. The financial statements were approved and authorised for issue by the Board of Directors on 8 March 2022 and were signed on its behalf by: Eileen Carr Non-Executive Chair Robert Smeeton Chief Financial Officer WWW.ORIOLERESOURCES.COM STATEMENT OF CONSOLIDATED CHANGES IN EQUITY 47 Attributable to owners of the Company Share capital £’000  Share premium £’000  Other reserves (see note 23) £’000  Retained earnings £’000  Balance at 1 January 2020 4,908 21,253 1,185 (17,578) Loss for the year Other comprehensive income Total comprehensive income for the year Issue of share capital net of expenses Share-based payments Share options expired Total transactions with owners of the Company Transfer between reserves Balance at 31 December 2020 and 1 January 2021 Loss for the year Other comprehensive income Total comprehensive income for the year Issue of share capital net of expenses Share-based payments Share option exercised Share options expired Total transactions with owners of the Company Balance at 31 December 2021 – – – – – – 759 1,609 – – 759 – – – 1,609 – – – – – – – 533 1,896 – – – – – – 533 6,200 1,896 24,758 5,667 22,862 1,591 Non- controlling interest £’000  (209) (42) – Total £’000  9,768 (278) (50) Total equity £’000  9,559 (320) (50) – (50) (278) – (50) (278) (328) (42) (370) – 125 (76) 49 407 – 44 44 – 7 (34) (2) (29) – – 76 76 (407) (18,187) (1,687) – 2,368 125 – 2,493 – 11,933 (1,687) 44 (1,687) (1,643) – – 34 2 36 2,429 7 – – 2,436 12,726 1,606 (19,838) – – – – – (251) 118 – 118 – – – – – (133) 2,368 125 – 2,493 – 11,682 (1,569) 44 (1,525) 2,429 7 – – 2,436 12,593 The share capital account includes the nominal value of all ordinary shares issued by the Company, as well as the nominal amount of the deferred shares created as part of the 2018 capital re-organisation. The share premium account includes the amounts received over and above the nominal value of each share upon issue of such shares, net of any expenses of that issue. Other reserves are described in note 23. Retained earnings comprises the retained profits and losses arising on the Group’s activities since inception. Non-controlling interests relates to the 15% holding of our local partner in the Group’s activities in Senegal. The notes on pages 52 to 75 form part of these financial statements. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS        48 STATEMENT OF CONSOLIDATED CASH FLOWS Cash flow from operating activities: Net cash used in operating activities Cash flow from investing activities: Purchase of property, plant and equipment Proceeds from disposal of financial asset Purchase of intangible assets Tax received Interest received Net cash (used in)/generated from investing activities Cash flow from financing activities: Net proceeds from the issue of shares Net cash generated from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period The notes on pages 52 to 75 form part of these financial statements. Year ended 31 December 2021 £’000 Year ended 31 December 2020 £’000 Notes 27 (1,072) (927) (15) – (1,778) 46 – (1,747) 2,429 2,429 (390) 1,751 1,361 (46) 172 (144) 165 – 147 2,368 2,368 1,588 163 1,751 10 20 18 WWW.ORIOLERESOURCES.COM STATEMENT OF COMPANY FINANCIAL POSITION Company number: 05601091 ASSETS Non-Current Assets Property, plant and equipment Intangible assets Financial assets at fair value through other comprehensive income Investments in equity-accounted associates Investment in subsidiaries Trade and other receivables Current Assets Trade and other receivables Cash and cash equivalents Total assets EQUITY Capital and reserves attributable to owners of the Company Share capital Share premium Other reserves Retained earnings Total equity LIABILITIES Current Liabilities Trade and other payables Total Equity and Liabilities 49 As at 31 December 2021 £’000 As at 31 December 2020 £’000 Notes 13 12 15 14 11 16 16 18 20 20 23 25 45 3,192 395 657 3,871 394 8,554 74 1,262 1,336 9,890 6,200 24,758 169 (21,724) 9,403 487 487 9,890 60 1,202 395 657 3,302 389 6,005 38 1,714 1,752 7,757 5,667 22,862 198 (21,187) 7,540 217 217 7,757 As permitted by section 408 of the Companies Act 2006, the profit and loss account of the parent company has not been separately presented in these accounts. The Parent Company loss for the year was £573,000 (2020: loss of £1,379,000). The notes on pages 52 to 75 form part of these financial statements. The financial statements were approved and authorised for issue by the Board of Directors on 8 March 2022 and were signed on its behalf by: Eileen Carr Non-Executive Chair Robert Smeeton Chief Financial Officer ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS 50 STATEMENT OF COMPANY CHANGES IN EQUITY Balance at 1 January 2020 Loss for the year Other comprehensive income Total comprehensive income for the year Issue of share capital net of expenses Share-based payments Share options expired Total transactions with owners of the Company Balance at 31 December 2020 and 1 January 2021 Loss for the year Other comprehensive income Total comprehensive income for the year Share capital £’000 4,908 – – – 759 – – 759 5,667 – – – – – – 1,609 – – 1,609 22,862 – – – Issue of share capital net of expenses 533 1,896 Share based payments Share options exercised Share options expired – – – – – – Total transactions with owners of the Company Balance at 31 December 2021 533 6,200 1,896 24,758 Information in respect of the Company’s reserves is set out on page 47. The notes on pages 52 to 75 form part of these financial statements. Share premium £’000 21,253 Other Reserves (see note 23) £’000 Retained earnings £’000 149 (19,884) Total equity £’000 6,426 (1,379) – (1,379) 2,368 125 – 2,493 7,540 (573) – (573) 2,429 7 – – 2,436 9,403 – – – – 125 (76) 49 198 – – – – 7 (34) (2) (29) 169 (1,379) – (1,379) – – 76 76 (21,187) (573) – (573) – – 34 2 36 (21,724) WWW.ORIOLERESOURCES.COM STATEMENT OF COMPANY CASH FLOWS Cash flow from operating activities Net cash used in operating activities Cash flow from investing activities Purchase of property, plant and equipment Investment in intangible assets Funding of subsidiary exploration companies Tax received Interest received Net cash (used in)/generated from investing activities Cash flow from financing activities Net proceeds from share issues Net cash generated from financing activities Net (decrease)/ increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period The notes on pages 52 to 75 form part of these financial statements. 51 Year ended 31 December 2021 £’000 Year ended 31 December 2020 £’000 Notes 27 (900) (885) (9) (1,750) (268) 46 – (1,981) 2,429 2,429 (452) 1,714 1,262 (46) (144) 126 165 – 101 2,368 2,368 1,584 130 1,714 20 18 ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS 52 NOTES TO THE FINANCIAL STATEMENTS accordance with UK-adopted international accounting standards. The financial statements were prepared Amendments to IAS 8 1. General information The principal activity of Oriole Resources Plc (‘the Company’) and its subsidiaries (together ‘the Group’) is the exploration and development of precious and high-value base metals. The Company’s shares are quoted on the AIM Market of the London Stock Exchange. The Company is incorporated and domiciled in the UK. The address of its registered office is 180 Piccadilly, London, W1J 9HF. 2. Summary of signif icant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented. 2.1 Basis of preparation These financial statements have been prepared in under the historical cost convention as modified by the measurement of certain investments at fair value. Going Concern It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 31 December 2021 the Group had cash and cash equivalents of £1,361k and no borrowings. Having considered the prepared cashflow forecasts, likely availability of investor support, the prospects for asset disposals, and Group budgets, the Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these financial statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the financial statements. There can be no assurance that the cash received from fund raises and asset sales will match the Board’s expectations, and this may affect the Group’s ability to carry out its work programmes as expected. Should the Group and Company be unable to continue trading as a going concern, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities which might arise and to classify non-current assets as current. (b) New and amended standards not yet adopted by the Group Standards/ interpretations Amendments to IFRS 3 Application Business Combinations – Reference to the Conceptual Framework – effective 1 January 2022* Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets – effective 1 January 2022* Amendments to IAS 16 Property, Plant and Equipment – effective 1 January 2022* Annual Improvements Annual Improvements to IFRS Standards 2018-2020 Cycle – effective 1 January 2022* Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Amendments to IAS 1: Classification of Liabilities as Current or Non-current – Deferral of Effective Date – effective 1 January 2023* Accounting policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates – effective 1 January 2023* *Subject to UK endorsement. There are no IFRS’s or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company or Group. 2.2 Basis of consolidation Oriole Resources PLC was incorporated on 24 October 2005 as Stratex International PLC. On 21 November 2005 the Company acquired the entire issued share capital of Stratex Exploration Ltd by way of a share for share exchange. The transaction was treated as a Group reconstruction and was accounted for using the merger accounting method. Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: ° Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the The financial statements have been prepared on the going investee); concern basis and do not include the adjustments that would result if the Group and Company were unable to continue as a going concern. ° Exposure, or rights, to variable returns from its involvement with the investee; ° The ability to use its power over the investee to affect The auditors have made reference to going concern by way its returns. of material uncertainty within their audit report. Changes in Accounting Policies (a) New and amended standards adopted by the Group There were no new IFRS or IFRIC interpretations effective for Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant the first time for the financial year beginning 1 January 2021 facts and circumstances in assessing whether it has power that had a material effect on the Group or Company financial over an investee, including: statements. WWW.ORIOLERESOURCES.COM 53 ° The contractual arrangement with the other vote holders References to joint venture agreements do not refer to of the investee; ° Rights arising from other contractual arrangements; ° The Group’s voting rights and potential voting rights. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. The business acquisition method is used to account for the acquisition of subsidiaries. Any contingent consideration is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or a liability is recognised in accordance with IFRS9 either in profit or loss or as a change in other comprehensive income. The unwinding of the discount on contingent consideration arrangements which meet the definition of joint ventures under IFRS 11 “Joint Arrangements” and therefore these Financial Statements do not reflect the accounting treatments required under IFRS 11. Investments in associates and jointly controlled entities are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in reserves is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses exceeds its interest in an equity-accounted investee the carrying amount of the investment, including any other unsecured receivables, is reduced to zero, and the recognition of further losses is discontinued, unless the Group has incurred obligations or made payments on behalf of the investee. liabilities is recognised as a finance charge within profit Unrealised gains on transactions between the Group and or loss. Acquisition related costs are expensed as incurred. equity–accounted investees are eliminated to the extent of the Group’s interest in the investee. Unrealised losses are also eliminated unless the transaction provides evidence of an The Group measures goodwill at the acquisition date as the impairment of the asset transferred. excess of the fair value of the consideration transferred, plus the recognised amount of any non-controlling interests, less the recognised amount of the identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions Accounting policies of equity–accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in equity–accounted investees are recognised in profit or loss. Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. Gains or losses on disposals to non-controlling interests are recorded in equity. and balances between group entities are eliminated The Group discontinues the use of the equity method from on consolidation. When the Group ceases to consolidate a subsidiary as a result of losing control and the Group retains an interest in the subsidiary and the retained interest is an associate, the Group measures the retained interest at fair value at that date and the fair value is regarded as its cost on initial recognition. The difference between the net assets de- consolidated and the fair value of any retained interest and any proceeds from disposing of a part interest in the subsidiary is included in the determination of the gain or loss on disposal. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be required if that subsidiary had directly disposed of the related assets or liabilities. Associates are all entities over which the Group has significant influence but not control over the financial and operating policies. the date when the investment ceases to be an associate or when the investment is classified as held for sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS54 NOTES TO THE FINANCIAL STATEMENTS CONTINUED When the Group reduces its ownership interest in an associate but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of 2.4 Intangible assets – Exploration and evaluation assets The Group capitalises expenditure in relation to exploration the gain or loss that had previously been recognised in and evaluation of mineral assets when the legal rights are other comprehensive income relating to that reduction in obtained. Expenditure included in the initial measurement of ownership interest if that gain or loss would be reclassified to exploration and evaluation assets and which are classified as profit or loss on the disposal of the related assets or liabilities. intangible assets relate to the acquisition of rights to explore, 2.3 Foreign currency translation (a) Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates research into the topographical, geological, geochemical and geophysical characteristics of the asset, exploratory drilling, trenching, sampling and activities to research the technical feasibility and commercial viability of extracting a mineral resource. (the ‘functional currency’). The consolidated financial Exploration and evaluation assets are not amortised but are statements are presented in sterling, which is the Group’s assessed for impairment, with an impairment test being presentation currency. (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. (c) Group companies The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: ° assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position. ° income and expenses in profit or loss for each statement of comprehensive income presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and ° all resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to other comprehensive income. When a foreign operation is sold, exchange differences that were recorded in equity are recognised in profit or loss as part of the gain or loss on sale. required when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas. Whenever the exploration for and evaluation of mineral resources does not lead to the discovery of commercially viable quantities of mineral resources or the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to profit or loss. 2.5 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments, have been identified as the executive Board of Directors. 2.6 Impairment of non-financial assets The carrying amount of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. In assessing the carrying values of major exploration assets, the Directors would use cash flow projections for each of the projects where a JORC – compliant indicated or measured resource had been calculated. The Group currently has no such directly controlled projects. Certain of the other exploration projects are at an early stage of development and no JORC-compliant resource estimate has been completed. In these cases, the Directors have assessed the impairment of the projects based on future exploration plans and estimates of geological and economic data. The Board does not believe that the key assumptions will change so as to cause the carrying values to exceed the recoverable amounts. WWW.ORIOLERESOURCES.COM 55 To date impairment losses recognised have followed the rate method. Any gain or loss arising on derecognition is decision of the Board not to continue exploration and recognised directly in profit or loss and presented in other evaluation activity on a particular project licence area where gains/(losses) together with foreign exchange gains and it is no longer considered an economically viable project losses. Impairment losses are presented as a separate line or where the underlying exploration licence has been item in the statement of profit or loss. relinquished. 2.7 Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand, and demand deposits with banks and other financial institutions. 2.8 Financial instruments (a) Classification The Group classifies its financial assets in the following measurement categories: ° those to be measured subsequently at fair value (either through Other Comprehensive Income (‘OCI’) or through profit or loss); and ° those to be measured at amortised cost. The Group’s financial assets at amortised cost include trade and other receivables. Equity instruments The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right to receive payments is established. Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment The classification depends on the Group’s business model for losses) on equity investments measured at FVOCI are not managing the financial assets and the contractual terms of reported separately from other changes in fair value. the cash flows. For assets measured at fair value, gains and losses will be (d) Impairment The Group assesses, on a forward-looking basis, the expected recorded either in profit or loss or in OCI. For investments credit losses associated with its debt instruments carried in equity instruments that are not held for trading, this will at amortised cost. The impairment methodology applied depend on whether the Group has made an irrevocable depends on whether there has been a significant increase in election at the time of initial recognition to account for the credit risk. equity investment at fair value through other comprehensive income (FVOCI). See Note 15 for further details. (b) Recognition Purchases and sales of financial assets are recognised on For trade and other receivables due within 12 months the Group applies the simplified approach permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but rather recognises a loss allowance based on the financial trade date (that is, the date on which the Group commits to asset’s lifetime expected credit losses at each reporting date. purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. (c) Measurement At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably. The Group considers evidence of impairment for financial assets measured at amortised cost at both a specific asset and collective level. are directly attributable to the acquisition of the financial An impairment loss in respect of a financial asset measured asset. Transaction costs of financial assets carried at FVPL are at amortised cost is calculated as the difference between expensed in profit or loss. Debt instruments Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS56 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 2.9 Deferred taxation Deferred tax is accounted for using the liability method in 2.12 Finance income Finance income comprises bank interest receivable. Interest respect of temporary differences arising from differences revenue is recognised using the effective interest method. between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability settled. Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. No liability to UK corporation tax 2.13 Other income Other income represents income from activities other than normal business operations. Royalty payments, arising from the involvement of exploration partners, are recognised as other income once payment has been received. 2.14 Post-employment benefits Retirement benefit costs are calculated by applying the Projected Unit Credit Method and the resulting adjustments are recognised in profit or loss. 2.15 Leases The Group assesses at contract inception, all arrangements to determine whether they are, or contain, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group is not a lessor in any transactions, it is only a lessee. arose on ordinary activities for the current period or prior The Group applies a single recognition and measurement periods. The Group has losses to be carried forward on which approach for all leases, except for short-term leases and no deferred tax asset is recognised. Deferred tax assets are leases of low-value assets. The Group recognises lease recognised on tax losses carried forward to the extent that liabilities to make lease payments and right-of-use assets the realisation of the related tax benefit through future representing the right to use the underlying assets. taxable profits is probable. (a) Right of use assets Current and deferred tax is charged or credited in the profit or loss, except when it relates to items charged or credited directly to equity, in which case the related tax is also dealt with in equity. The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date when the underlying asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and 2.10 Share-based payments The fair value of the services received from employees and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes third parties in exchange for the grant of share options the amount of lease liabilities recognised, initial direct is recognised as an expense. The fair value of the options costs incurred, and lease payments made at or before the granted is calculated using the Black-Scholes pricing model commencement date less any lease incentives received. and is expensed over the vesting period. At each reporting Right of use assets are depreciated on a straight-line basis period the Group revises its estimate of the number over the shorter of the lease term and the estimated useful of options that are expected to become exercisable. It lives of the assets, as follows: recognises the impact of the revision of original estimates, if any, in profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The proceeds ° Computer equipment – 5 years Right of use assets are subject to impairment (see Note 2.6). received net of any directly attributable transaction costs are (b) Lease liabilities credited to share capital (nominal value) and share premium when the options are exercised. 2.11 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds. At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable. WWW.ORIOLERESOURCES.COM 57 In calculating the present value of lease payments, the In order to maintain or adjust the capital structure, the Group uses its incremental borrowing rate at the lease Company may adjust the amount of dividends paid to commencement date because the interest rate implicit in shareholders, return capital to shareholders, or issue new the lease is generally not readily determinable. shares. Note that the lease liability recorded in the financial statements has not been discounted to present value as any impact of discounting would be immaterial to the financial statements. 3. Risk management 3.1 Financial risk management The main financial risks facing the Group are the availability of adequate funding, movements in interest rates and fluctuations in foreign exchange rates. Constant monitoring of these risks ensures that the Group is protected against any potential adverse effects of such risks so far as it is possible 4. Critical accounting estimates and judgements The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the reporting date, most importantly the carrying values assigned to intangible assets, associates, and financial assets designated as fair value through other comprehensive income. Actual results may vary from the estimates used to produce these financial statements. and foreseeable. The Group only deals with high-quality Estimates and judgements are continually evaluated and are banks. It does not hold derivatives, does not trade in financial based on historical experience and other factors, including instruments and does not engage in hedging arrangements. expectations of future events that are believed to be In keeping with similar sized mineral exploration groups, its continued future operations depend on the ability to raise sufficient working capital. The Group finances itself through reasonable under the circumstances. Exploration asset carrying value The most significant judgement for the Group is the the monetisation of exploration assets and the issue of assumption that exploration at the various sites will equity share capital and has no borrowings. Management ultimately lead to a commercial mining operation, which monitors its cash and future funding requirements through includes the assumption that any licenses held will be the use of on-going cash flow forecasts. All cash, with the renewed as required upon expiry. Failure to do so could exception of that required for immediate working capital lead to the write-off of the intangible assets relating to the requirements, is held on short term deposit. particular site (see note 2.4). The Group’s only exposure to interest rate fluctuations is restricted to the rates earned on its short-term deposits. Thani Stratex Resources carrying value The Directors have given consideration to the carrying value These deposits returned an interest rate of between 0.1% and of the 24.92% holding in Thani Stratex Resources Limited 0.25% during the past year. (‘TSR’) which has a book value of £1.45m and in the Directors’ The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Turkish Lira, Euro and US Dollar, see note 19. Foreign exchange risk arises from future commercial transactions and net investments in foreign operations. The Group does not hedge its exposure to foreign currencies and recognises the profits and losses resulting from currency fluctuations as and when they arise. judgment this value is recoverable. In 2021, TSR signed an earn-in agreement with Red Sea Resources Limited, who are to spend approximately $2.4m to advance the current resources on the licence (JORC Inferred Resource of 209,000 ounces of gold at Anbat and a non-JORC Inferred Resource of 520,000 ounces of gold at Hutite). Whilst this will lead to dilution, the Directors believe the proposed investment will enhance the value of the Group’s shareholding. The carrying value has therefore been maintained, with £135,000 of the The Group will continue to make substantial expenditures £1.4m impairment provision booked in 2018 reversed in 2021 related to its exploration and development activities. The in order to maintain the carrying value of TSR at £1.45m, financial exposure of the Group has been substantially being the Directors’ best estimate using all information reduced as a result of entering into agreements with third available at this time. parties. 3.2 Capital risk management The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS58 NOTES TO THE FINANCIAL STATEMENTS CONTINUED Local taxes The Group is subject to income taxes in numerous jurisdictions. Judgement is required in determining the worldwide provision for such taxes. The Group recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will affect the current and deferred income tax assets and liabilities in the period in which such determination is made. No deferred tax balances are currently recognised in the accounts in respect of temporary timing differences relating to the Group’s untangible assets or unutilised losses. Provision for bad debts The Group is currently due $425,000 from Anadolu Export Maden Sanayi ve Ticaret Limited Şirketi in respect of a success- based payment of $500,000 that was due on the basis of an exploration partnership with that company. The Directors continue to pursue payment, but have made full provision against the debt in these financial statements. 5. Segment reporting The Group's main exploration operations are located in Turkey, East Africa and West Africa. The Group's head office is located in the UK and provides corporate and support services to the Group and researches new areas of exploration opportunities. The management structure and the management reports received by the Directors and used to make strategic decisions reflect the split of operations. (a) The allocation of assets and liabilities by segment is as follows: At 31 December 2021 Intangible assets Property, plant and equipment Investment in associate companies Cash and other assets Liabilities Inter-segment Net assets Additions to property, plant and equipment At 31 December 2020 Intangible assets Property, plant and equipment Investment in associate companies Cash and other assets Liabilities Inter-segment Net assets Additions to property, plant and equipment Exploration Turkey £’000 East Africa £’000 West Africa £’000 UK support & other £’000 – – – 81 (43) (3,281) (3,243) 3 – – 1,449 789 – – 2,238 – 9,376 36 – 79 (20) (2,849) 6,622 8 – 12 – 1,338 (504) 6,130 6,976 3 Exploration Turkey £’000 East Africa £’000 West Africa £’000 UK support & other £’000 – 1 – 58 (47) (3,264) (3,252) – – – 1,449 784 – – 2,233 – 7,771 46 – 95 (19) (2,354) 5,539 47 – 14 – 1,751 (221) 5,618 7,162 – Group Total £’000 9,376 48 1,449 2,287 (567) – 12,593 14 Group Total £’000 7,771 61 1,449 2,688 (287) – 11,682 47 WWW.ORIOLERESOURCES.COM                   59 The capitalised cost of the principal projects and the additions during the year are as follows: Capitalised cost Additions in year West Africa Senegal Cameroon Total Intangible assets 2021 £’000 6,177 3,199 9,376 2020 £’000 6,568 1,203 7,771 2021 £’000 22 1,996 2,018 (b) The allocation of profits and losses for the year by segment is as follows: Exploration Turkey £’000 East Africa £’000 West Africa £’000 UK support & other £’000 2020 £’000 – 184 184 Group Total £’000 – (1,074) (9) 210 (163) (571) – 38 Group Total £’000 – (1,010) (8) 365 (132) 317 – 148 (320) 2020 £’000 (63) – (922) (2) – – (2) 291 46 – (861) (8) – – (71) 218 165 (557) 2021 £’000 (133) (589) (1,569) Exploration Turkey £’000 East Africa £’000 West Africa £’000 UK support & other £’000 – (38) (3) 75 – (18) – (8) 8 – – – 135 (163) 28 – – – – (114) (4) – – (579) (291) – (988) – (62) – 162 – (11) – (17) 72 – – – 203 (132) (71) – – – – (87) – – – 470 (218) – 165 2021 Revenue Administration expenses Depreciation charge Other income/(losses) Share of associate company losses Exchange gains/(losses) Inter-segment charges Income tax Profit/(loss) for year 2020 Revenue Administration expenses Depreciation charge Other income/(losses) Share of associate company losses Exchange gains/(losses) Inter-segment charges Income tax. Profit/(loss) for year 6. Loss on change of ownership interest Loss for the year on change of ownership interest Small changes to the Company’s interest in Thani Stratex Resources Limited during the year have resulted in a loss of £133,000, which has been recognised in the consolidated statement of comprehensive income. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS      60 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 7. Other (losses)/prof its Exchange (losses)/ gains Reversal of impairment (see note 14) Other profits Net other (loss)/profit for the year 8. Expenses by nature Administration expenses comprise: Personnel expenses (see note 9) Legal and professional expenses Amounts paid to the Company’s auditors (see below) Office costs Travel costs Depreciation expense Other expenses Total for year During the year the Group obtained the following services from the Company’s auditor: Auditor’s remuneration Fees payable for the audit of parent and consolidated financial statements Total for year 9. Personnel expenses 2021 £’000 (571) 135 75 (361) 2021 £’000 833 187 27 65 17 9 (55) 1,083 2021 £’000 27 27 2020 £’000 317 203 162 682 2020 £’000 752 255 25 57 39 8 (118) 1,018 2020 £’000 25 25 Wages and salaries Social security costs Share options granted to Directors and employees Employee benefits-in-kind Employee pensions Total for year Average number of employees, including Directors Group Company 2021 £’000 770 40 7 3 13 833 13 2020 £’000 2021 £’000 2020 £’000 569 49 125 1 8 752 13 531 40 7 3 13 594 9 322 49 125 1 8 505 8 Details of the Directors’ remuneration is shown in the Report of the Remuneration Committee on page 34. WWW.ORIOLERESOURCES.COM 10. Income tax Analysis of income tax expense: Current taxation: UK Corporation tax credit for the year Deferred taxation: Deferred tax charge for the year Total tax on loss for the year 61 2021 £’000 2020 £’000 46 (8) 38 165 (17) 148 The Group does not anticipate a UK corporation tax charge for the year due to the availability of tax losses. The Group did not recognise deferred income tax assets of approximately £770,000 (2020: £1,700,000). Reconciliation of tax credit: Loss before tax Current tax credit at 19% (2020: 19%) Effects of: Expenses not deductible for tax purposes Tax losses carried forward – UK Tax losses carried forward – outside UK Origination and reversal of temporary differences Prior year differences (research and development credits claim) Tax credit 11. Investment in subsidiaries The cost of shares in subsidiary companies is as follows: Company Cost of investment at 1 January Impairment provision Loans to subsidiary companies At 31 December 2021 £’000 (1,607) 305 (4) (442) (199) 332 46 38 2020 £’000 (468) 89 25 (167) (14) 50 165 148 2021 £’000 2,701 2020 £’000 2,699 (1,000) (1,000) 1,701 2,170 3,871 1,699 1,603 3,302 During the prior year the Company made a provision for impairment against its investment in Stratex Exploration Limited. There are no significant restrictions in relation to the subsidiaries. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS62 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 11. Investment in subsidiaries continued Investments in subsidiaries are stated at cost and are as follows: Country of incorporation % owned by the Company % owned by subsidiary Nature of Business Stratex Exploration Ltd Stratex Gold AG Stratex West Africa Limited RMC Cameroon (BVI) Corp Reservoir Minerals Cameroon SARL Oriole Cameroon SARL OrrCam2 SARL Stratex Madencilik Sanayi Ve Ticaret Ltd. Şti Stratex EMC SA UK Switzerland UK British Virgin Islands Cameroon Cameroon Cameroon Turkey Senegal 100 100 100 56.7 – 90 90 – – – – – – Holding company Holding company Exploration Holding company 90 for effective 51% Group holding – – 100 85 Exploration Exploration Exploration Exploration Exploration Stratex Exploration Ltd 180 Piccadilly, London, W1J 9HF, UK Stratex Gold AG Goethestrasse 61, St Gallen, 9008, Switzerland Registered office Stratex West Africa Limited Wessex House, Upper Market Street, Eastleigh, Hampshire, SO50 9FD, UK RMC Cameroon (BVI) Corp Tropic Isle Building, Nibbs Street, Road Town, Tortola, VG1110, British Virgin Islands Reservoir Minerals Cameroon SARL Yaoundé-Rue Marie Gocker, Place De L’Intendance, BP 11792, Yaoundé, Cameroon Oriole Cameroon SARL Yaoundé-Rue Marie Gocker, Place De L’Intendance, BP 11792, Yaoundé, Cameroon OrrCam2 SARL Yaoundé-Rue Marie Gocker, Place De L’Intendance, BP 11792, Yaoundé, Cameroon Stratex Madencilik Sanayi Ve Ticaret Ltd. Sti Cukurambar Mahallesi 1458. Sokak, Elit Aprt. No: 17/6, Ankara, Turkey Stratex EMC SA Wessex House, Upper Market Street, Eastleigh, Hampshire, SO50 9FD, UK 12. Intangible assets The Group's Intangible assets comprise entirely of exploration assets. Cost Cost at 1 January Exchange movements Additions At 31 December Group Company 2021 £’000 7,771 (413) 2,018 9,376 2020 £’000 7,244 343 184 7,771 2021 £’000 1,202 – 1,990 3,192 2020 £’000 1,018 – 184 1,202 WWW.ORIOLERESOURCES.COM 63 Total £’000 238 47 285 (32) 14 (30) 237 (217) (7) (224) 31 (26) 30 (189) 21 61 48 7 Group Motor Vehicles £’000 Field Equipment £’000 Office furniture and equipment £’000 30 – 30 – – (30) – (30) – (30) – – 30 – – – – – 19 47 66 (1) – – 65 (19) – (19) 1 (16) – (34) – 47 31 – 189 – 189 (31) 14 – 172 (168) (7) (175) 30 (10) – (155) 21 14 17 7 13. Property, plant, and equipment Cost At 1 January 2020 Additions At 31 December 2020 Exchange movements Additions Disposals At 31 December 2021 Depreciation At 1 January 2020 Additions At 31 December 2020 Exchange movements Additions Disposals At 31 December 2021 Net Book Value at 1 January 2020 at 31 December 2020 at 31 December 2021 Right of use assets included above ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS64 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 13. Property, plant, and equipment continued Company Motor Vehicles £’000 Field Equipment £’000 Office furniture and equipment £’000 Cost At 1 January 2020 Additions At 31 December 2020 Additions At 31 December 2021 Depreciation At 1 January 2020 Additions At 31 December 2020 Additions At 31 December 2021 Net Book Value at 1 January 2020 at 31 December 2020 at 31 December 2021 Right of use assets included above 14. Investment in equity-accounted associates At 1 January Exchange movements Share of losses Transfer to other financial assets Loss on change of ownership interest Release of impairment provision At 31 December – – – – – – – – – – – – – – – 47 47 – 47 – – – (16) (16) – 47 31 – 108 – 108 8 116 (88) (7) (95) (7) (102) 20 13 14 7 Group Company 2021 £’000 1,449 28 (30) – (133) 135 2020 £’000 2,250 (71) (69) (801) (63) 203 2021 £’000 657 – – – – – 1,449 1,449 657 Total £’000 108 47 155 8 163 (88) (7) (95) (23) (118) 20 60 45 7 2020 £’000 1,458 – – (801) – – 657 The Company's shareholding interest in Thani Stratex Resources Limited ("TSRL") was maintained at 24.92% during the course of the year, however TSRL’s interest in the underlying Hodine licence was reduced by 7%, leading to a loss on change of ownership. £135,000 of the impairment provision recognised in 2018 has been reversed in 2021, as the Directors believe the value of the investment has been maintained over the year (see note 4). WWW.ORIOLERESOURCES.COM 65 14. Investment in equity-accounted associates continued The following entity has been included in the consolidated financial statements using the equity accounting method: Thani Stratex Resources Limited 2021 Value £’000 1,449 % 24.9 Change £’000 – % 24.9 2020 Value £’000 1,449 Change £’000 – Thani Stratex Resources Limited has a reporting date of 31 December and its registered office is PO Box 173, Kingston Chambers, Road Town, Tortola, British Virgin Islands. Summarised financial information for investments accounted for using an equity accounting method is shown below. This information reflects the amounts presented in the draft financial statements of the associates (and not Oriole Resources PLC’s share of those amounts) adjusted for differences in accounting policies between the Group and associates: Statement of financial position for Thani Stratex Resources Limited As at 31 December Current Assets Cash and equivalents Net current liabilities Total current liabilities Non-current assets Furniture, fittings and equipment Intangible assets Total non-current assets Non-current liabilities Net assets Statement of comprehensive income for Thani Stratex Resources Limited As at 31 December Administration expenses Depreciation Exchange gains Loss from continuing operations Income tax expenses Loss after tax for continuing operations Share of associated company loss Total comprehensive income 2021 £’000 2020 £’000 1 (289) (288) 1 14,758 14,759 (4,174) 10,297 1 (283) (282) 1 14,102 14,103 (4,088) 9,733 2021 £’000 2020 £’000 (120) (267) – – (120) – (120) – (120) (1) (1) (269) – (269) – (269) ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS66 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 15. Financial Assets and Liabilities (a) Financial Assets Financial assets at amortised cost: Trade and other receivables Deposits and guarantees Cash and cash equivalents Loan note receivable Financial assets at fair value through other comprehensive income Total (b) Financial Liabilities Group 2021 £’000 137 46 1,315 394 395 2020 £’000 132 7 1,751 389 395 2,287 2,674 Company 2021 £’000 74 – 1,262 394 395 2,125 2020 £’000 38 – 1,714 389 395 2,536 Group 2021 £’000 Company 2020 £’000 2021 £’000 2020 £’000 Financial liabilities at amortised cost: Trade creditors Amounts due to related parties and employees Social security and other taxes Leases Accrued expenses Total 80 23 54 7 403 567 87 29 62 12 97 287 67 – 36 7 377 487 (c) Assets by quality Trade Receivables: Trade receivables includes net receivables from exploration partners of £30,000 (2020: £7,000). None of the exploration partners have external credit ratings. Cash and cash equivalents: External ratings of cash at bank and short-term deposits: A Ba, Bb & Bbb Total (d) Financial Assets at Fair Value Through Other Comprehensive Income (‘FVOCI’) 2021 £’000 1,262 99 1,361 At 1 January Transfer from equity-accounted associates Disposals Fair value adjustment At 31 December Group Company 2021 £’000 395 – – – 395 2020 £’000 165 395 (165) – 395 2021 £’000 395 – – – 395 65 – 48 12 92 217 2020 £’000 1,714 37 1,751 2020 £’000 – 395 – – 395 WWW.ORIOLERESOURCES.COM 67 15. Financial Assets and Liabilities continued Equity investments at FVOCI comprise the following individual investments: Thani Stratex Djibouti – Unlisted Equity Security At 31 December Group Company 2021 £’000 395 395 2020 £’000 395 395 2021 £’000 395 395 2020 £’000 395 395 On disposal of these equity investments, any related balance within the FVOCI reserve is reclassified to retained earnings. Information about the methods and assumptions used in determining fair value is provided in (f) below. The assets are held in non-sterling currencies but there are no significant exchange rate risks associated with these investments. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and which the Group has irrevocably elected at initial recognition to recognise in this category. These are strategic investments and the Group considers this classification to be more relevant. (e) Financial Assets at Fair Value Through Profit and Loss (‘FVPL’) The Group classifies the following financial assets at fair value through profit or loss: 1. Equity instruments for which the entity has not elected to recognise fair value gains and losses through OCI. The Group’s investment in Muratdere Madencilik Sanayi ve Ticaret AS (‘Muratdere’) is held at £Nil (2020: £Nil) in the consolidated financial statements following its write down in 2017. (f) Fair Value Hierarchy This section explains the judgements and estimates made in determining the fair values of financial instruments that are recognised and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments into the three levels prescribed under Accounting Standards, as set out and explained below: Recurring fair value measurements At 31 December 2021 Financial assets at fair value through other comprehensive income: Djibouti unlisted equity securities Total Financial Assets At 31 December 2020 Financial assets at fair value through other comprehensive income: Djibouti unlisted equity securities Total Financial Assets Level 3 £’000 Total £’000 395 395 395 395 395 395 395 395 There were no transfers of assets between levels for recurring fair value measurements during the year. The Group has no level 1 or 2 financial instruments. Level 3 – if one or more of the significant valuation inputs is not based on observable market data, the instrument is held at level 3. This is the case for unlisted securities. Specific valuation techniques used to value financial instruments include: ° The use of quoted market prices to provide comparative pricing for Level 3 instruments when reviewed against comparable companies at similar stages of asset development. ° Cost of asset development work to date, together with a review of exploration results and a view of market values of similar companies. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS68 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 16. Trade and other receivables The fair value of trade and other receivables equate to their carrying values, which also represents the Group’s maximum exposure to credit risk. No collateral is held as security. Receivables from exploration partners Bad debt provision Deposits and guarantees given Loans Loan note (see below) Prepayments and other current assets Total Non-current Current Total Group Company 2021 £’000 381 (326) – 43 394 39 531 394 137 531 2020 £’000 333 (326) 7 91 389 34 528 389 139 528 2021 £’000 2020 £’000 – – – – 394 74 468 394 74 468 – – – – 389 38 427 389 38 427 The loan note for $530,806 is interest-free and is repayable by Thani Stratex Djibouti Limited in accordance with a loan note instrument dated 14 November 2019. $425,000 of a success-based payment due from Anadolu Export Maden Sanayi ve Ticaret A.S. is past due, and has been fully provided against in these, and the prior year, financial statements. 17. Deferred tax asset and liabilities Group Deferred tax assets Temporary timing differences arising on: Intangible assets Employee termination benefits Total The movement in the year on the net deferred tax assets is: At 1 January Exchange movements Movement in year At 31 December 18. Cash and cash equivalents Cash at bank and on hand Short-term deposits Total 2021 £’000 2020 £’000 – – – 12 2 14 2021 £’000 2020 £’000 14 (6) (8) – Group Company 2021 £’000 1,315 46 1,361 2020 £’000 1,751 – 1,751 2021 £’000 1,262 – 1,262 38 (7) (17) 14 2020 £’000 1,714 – 1,714 WWW.ORIOLERESOURCES.COM 69 19. Currency risk The Group’s exposure to foreign currency is as follows: GBP £’000 Trade and other receivables Cash and cash equivalents Trade and other payables Net exposure The following year end spot rates to sterling have been applied A 20% fluctuation in the sterling exchange rate would have affected profit and loss as follows: Strengthening of sterling* Weakening of sterling* 2021 2020 US$ – 142 (200) (58) Euro Turkish Lira – 273 (160) 113 30 52 (43) 39 US$ – 459 – 459 Euro Turkish Lira – 441 (19) 422 74 12 (47) (39) 1.1584 1.1907 17.9514 1.365 1.118 10.1243 £’000 £’000 £’000 £’000 £’000 £’000 – – – – 7 (7) – – – – (3) 3 * Dollar and Euro amounts shown above were acquired specifically to fund the foreign currency elements of capital expenditure and as such fluctuations would have no impact on profit and loss. 20. Share capital and share premium Group and Company At 1 January 2021 Issued during the year Expenses of share issue At 31 December 2021 Number of Ordinary shares issued 1,461,155,197 532,866,139 – 1,994,021,336 Ordinary shares £’000 Deferred shares £’000 Share premium £’000 Total £’000 1,461 533 – 1,994 4,206 22,862 28,529 – – 1,999 (103) 2,532 (103) 4,206 24,758 30,958 During the year the Company raised capital by way of an equity placing upon one occasion: ° On 4 October 2021 the Company issued 416,470,880 Ordinary 0.1p shares at a price of 0.425p per share. In addition, during the year existing share options and share warrants over the Ordinary 0.1p shares of the Company were exercised as follows: ° 1,550,000 share options were exercised at a price of 0.37p per share; ° 13,470,000 share warrants were exercised at a price of 0.5p per share ° 1,630,298 share warrants were exercised at a price of 0.6p per share; and ° 99,744,961 share warrants were exercised at a price of 0.68p per share. The Ordinary shares have a nominal value of 0.1p and all shares have been fully paid. At the 2018 as part of a capital re-organisation, 467,311,276 deferred shares were created, each with a nominal value of 0.9p. The Deferred Shares have no right to vote, attend or speak at general meetings of the Company and have no right to receive any dividend or other distribution and have only limited rights to participate in any return of capital on a winding-up or liquidation of the Company, which will be of no material value. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS70 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 21. Earnings per share The calculation of the basic earnings per share is based on the loss attributable to the equity holders of the Company and a weighted average number of Ordinary shares in issue during the year, as follows: Loss attributable to owners of the Company from continuing operations 2021 £’000 (1,687) 2020 £’000 (278) Weighted average number of ordinary shares in issue 1,661,670,893 917,570,302 Basic and diluted loss per share from continuing operations (pence per share) (0.10) (0.03) There is no difference between basic and diluted loss per share as the effect on the exercise of the options would be to decrease the earnings per share. At 31 December 2021 there were 81,592,912 (2020: 83,192,912) share options and 208,385,020 (2020: 323,230,279) warrants that could potentially dilute the earnings per share in the future. Deferred shares have no rights to dividends or retained profits and are excluded from the calculation of earnings per share. 22. Share options and warrants Share options The Directors have discretion to grant options to Group employees to subscribe for Ordinary Shares up to a maximum of 10% of the Company’s issued share capital. The Company runs two schemes, one is the Enterprise Management Incentive scheme and the other is the Unapproved Share Option scheme. As at 31 December 2021, the Company had in issue 71,471,892 (2020: 79,042,912) options to Group employees granted under the Enterprise Management Incentive scheme and 9,787,687 (2020: 3,650,000) options to Group employees granted under the unapproved scheme. In addition, there are 333,333 (2020: 500,000) unexercised options held by past employees. All options vest over one to three years from the grant date and lapse on the tenth anniversary of the grant date, except for the 39,884,912 options granted to Directors during the prior year, in lieu of salary, which vested immediately. The granting of the share options has been accounted for as equity-settled share-based payment transactions. The total expenses recognised in the loss for the year arising from share-based payments was £7,000 (2020: £125,000). The Group has no legal or constructive obligation to repurchase or settle the options in cash. Movements in the number of share options outstanding and their related weighted average exercise prices are as follows: Group and Company Outstanding at 1 January Issued Exercised Expired Cancelled Outstanding at 31 December Exercisable at 31 December 2021 2020 Weighted average exercise price pence Weighted average exercise price pence Number of options Number of options 83,192,912 0.31 32,469,067 – – 56,234,912 (1,550,000) (50,000) – 81,592,912 64,542,912 0.37 7.0 – 0.29 0.27 – (5,251,067) (260,000) 83,192,912 51,842,912 0.97 0.18 – 3.17 (0.81) 0.31 0.26 The weighted average contractual life of the outstanding options at 31 December 2021 was 9.15 years (2020: 8.94 years). WWW.ORIOLERESOURCES.COM 71 Outstanding 31 December 2021 60,000 150,000 198,000 6,000,000 2,000,000 16,950,000 39,884,912 16,350,000 81,592,912 Option Price pence 2.7 1.5 2.0 0.9 0.62 0.37 0.10 0.37 22. Share options and warrants continued Details of share options outstanding at 31 December 2021 are as follows: Life of option Expiry date 5 December 2024 4 June 2025 2 September 2026 1 March 2028 4 June 2028 19 March 2029 19 August 2030 22 December 2030 Start date 5 December 2014 4 June 2015 2 September 2016 1 March 2018 4 June 2018 19 March 2019 19 August 2020 22 December 2020 Total options outstanding Share Warrants Group and Company Outstanding at 1 January Issued Exercised Outstanding at 31 December Start date 3 June 2020 29 October 2020 Total warrants outstanding 2021 2020 Weighted average exercise price pence Number of warrants Weighted average exercise price pence Number of warrants 323,230,279 0.61 48,469,987 – – 274,760,292 (114,845,259) 0.66 – 208,385,020 0.66 323,230,279 Life of warrant Expiry date 3 June 2022 29 October 2022* Outstanding 31 December 2021 33,369,689 175,015,331 208,385,020 0.57 0.68 – 0.61 Warrant Price Pence 0.60 0.68 * The Company have the right to force exercise of those warrants in the event the 10-day volume weighted average share price exceeds 1.02 pence at any time. This condition was fulfilled during 2021. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS72 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 23. Other reserves Group At 1 January 2020 Share based payments Share options expired Other comprehensive income Transfer to retained earnings At 31 December 2020 Share based payments Share options exercised Share options expired Other comprehensive income Transfer to retained earnings At 31 December 2021 Company At 1 January 2020 Share based payments Share options expired At 31 December 2020 Share based payments Share options exercised Share options expired At 31 December 2021 Merger reserve £’000 (485) – – – – (485) – – – – – (485) FVOCI reserve £’000 (407) – – – 407 – – – – – – – Share option reserve £’000 149 125 (76) – – 198 7 (34) (2) – – 169 Translation reserve £’000 1,928 – – (50) – 1,878 – – – 44 – 1,922 Share option reserve £’000 149 125 (76) 198 7 (34) (2) 169 Total £’000 1,185 125 (76) (50) 407 1,591 7 (34) (2) 44 – 1,606 Total £.000 £’000 149 125 (76) 198 7 (34) (2) 169 The Merger reserve arose on consolidation as a result of the merger accounting for the acquisition of the entire issued share capital of Stratex Exploration Limited during 2005 and represents the difference between the nominal value of shares issued for the acquisition and that of the share capital and share premium account of Stratex Exploration Limited. The Group has elected to recognise changes in the fair value of certain investments in equity securities through Other Comprehensive Income, as explained in Note 15 and the accounting policies. These changes are accumulated within the FVOCI reserve within equity. The Group transfers amounts from this reserve to retained earnings when the relevant equity securities are realised. The Share option reserve balance relates to the fair value of outstanding share options measured using the Black-Scholes method. The Translation reserve comprises the exchange differences from translating the net investment in foreign entities and of monetary items receivable from subsidiaries for which settlement is neither planned nor likely in the foreseeable future (see Note 2.3). WWW.ORIOLERESOURCES.COM 24. Non-controlling interest Effect on equity of transactions with non-controlling interests: Balance attributable to NCI At 1 January 2020 Losses for the year At 31 December 2020 Gain for the year At 31 December 2021 73 Stratex EMC SA £’000 (209) (42) (251) 118 (133) Total £’000 (209) (42) (251) 118 (133) The non-controlling interest arises in the 15% holding by a third party in Stratex EMC SA, whose financial statements include the following balances: Stratex EMC SA Intangible assets Other assets Intercompany loans Other creditors Net liabilities (Loss)/profit for the year Cash flows: Cash flows from operations Cash flows from intercompany funding Net cash flow 25. Trade and other payables Trade payables Amounts due to related parties and employees Social security and other taxes Lease liability Accrued expenses At 31 December 2021 £’000 5,811 952 (8,633) (22) (1,892) (806) (219) 217 (2) Group Company 2021 £’000 80 1 54 7 403 545 2020 £’000 87 26 62 12 97 284 2021 £’000 67 – 36 7 377 487 2020 £’000 6,223 1,030 (8,416) (19) (1,182) 265 (183) 174 (9) 2020 £’000 65 – 48 12 92 217 All financial liabilities, except those for accrued expenses, are stated where material at amortised cost. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS74 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 26. Leases The Group has in place one lease contract for computer equipment used in its operations. The lease has a term of 5 years. The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. The Group is restricted from assigning and subleasing the leased asset. There are no variable lease payments attached. The right of use asset recognised in respect of this lease has a carrying value of £8,000 (2020: £10,000) and is included within tangible fixed assets. Depreciation of £3,000 (2020: £3,000) has been recorded in the year. The lease liability is included within trade and other payables and has a carrying value of £7,000 (2020: £12,000). Cash payments of £5,000 (2020: £3,000) have been made in payment of the liability during the year. Neither the right of use asset nor the lease liability have been recorded separately on the statement of consolidated or company financial position as the values are not material. 27. Cash flow f rom operating activities Group Company Loss before income tax Adjustments for: Issue of share options Depreciation Impairment of FAFVPL Share of losses of associates Other Income and deductions Interest income on intercompany indebtedness Intercompany management fees 2021 £’000 (1,607) 7 9 – 163 (135) – – 2020 £’000 (468) 125 8 – 203 (203) – – Foreign exchange movements on operating activities 498 (428) Changes in working capital, excluding the effects of exchange differences on consolidation: Trade and other receivables Trade and other payables Cash used in operations (65) 58 (1,072) 44 (208) (927) 2021 £’000 (619) 2020 £’000 (1,543) 7 6 – – – (18) (281) (5) (37) 47 (900) 125 7 747 – – (21) (69) 15 11 (157) (885) WWW.ORIOLERESOURCES.COM 75 28. Related party transactions (a) Transactions with non-controlling interests: During the year the Company spent £3,000 (2020: £3,000) with Minexia Limited, a company in which Tim Livesey and Robert Smeeton have 10.33% and 2.35% shareholdings respectively. (b) Parent company and ultimate controlling party: In the opinion of the Directors there is no ultimate controlling party. (c) Amounts provided to subsidiaries: During the year the Company provided funds amounting to £567,000 (2020: £101,000) to its subsidiaries and charged its subsidiary companies £281,000 (2020: £70,000) for the provision of management services. The total gross receivable from subsidiaries at 31 December 2021 was £5,339,000 (2020: £4,832,000). (d) Transactions with Directors and Key Management Personnel: During the year the Directors were remunerated for services performed on behalf of the Company. Details of this remuneration are included in the Report of the Remuneration Committee. All Directors during the year were remunerated through the UK payroll. There are not considered to be any key management personnel other than Directors. 29. Contingencies and capital commitments There are no contingencies or capital commitments at 31 December 2021. 30. Parent company statement of comprehensive income As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the parent company is not presented as part of these financial statements. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS 76 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Annual General Meeting that this power shall: of Oriole Resources Plc (the “Company”) will be held at the offices of Grant Thornton UK LLP, located at 30 Finsbury Square, London, EC2A 1AG on 26 April 2022, at 11:00am. The business of the meeting will be to consider and, if thought fit, pass the following Resolutions: Ordinary resolutions 1. THAT the Directors’ Report and the Financial Statements of the Company for the year ended 31 December 2021 be received and adopted. 2. THAT, having retired by rotation in accordance with the Company’s Articles of Association, and being eligible, David Pelham be re-appointed as a Director of the Company. 3. TO re-elect Director Claire Bay, who was appointed since the last Annual General Meeting and retires in accordance with the Company’s Articles of Association, and being eligible, offers herself for re-appointment. 4. TO re-elect Director Eileen Carr, who was appointed since the last Annual General Meeting and retires in accordance with the Company’s Articles of Association, and being eligible, offers herself for re-appointment. 5. THAT PKF Littlejohn LLP be re-appointed as auditors of the Company, and that the Directors be authorised to determine the auditors’ remuneration. 6. THAT, in addition to the existing authorities, and in accordance with section 551 of the Companies Act 2006 (the “Act”) the Directors be generally and unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company (“Rights”) up to an aggregate nominal amount of £1,600,000 provided that: a. be limited to the allotment of equity securities up to an aggregate nominal amount of £1,000,000; and b. expire with the authority granted by resolution 6 (unless previously revoked, varied or extended by the Company at a general meeting) at the conclusion of the next Annual General Meeting, save that the Company may, before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired. 8. THAT, in addition to the authority granted by resolution 7 above, subject to the passing of resolution 6 and in accordance with section 570 of the Act, the Directors be generally empowered to allot equity securities (as defined in section 560 of the Act) for cash pursuant to the authority conferred by resolution 6, as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall: a. be limited to the allotment of equity securities up to an aggregate nominal amount of £600,000; and b. expire with the authority granted by resolution 6 (unless previously revoked, varied or extended by the Company at a general meeting) at the conclusion of the next Annual General Meeting, save that the Company may, before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired. a. this authority shall, unless previously revoked, varied or extended by the Company at a general meeting, expire at the conclusion of the next annual general meeting of the Company; and By order of the Board R J Smeeton Company Secretary b. that the Company may, before such expiry, make 8 March 2022 an offer or agreement which would or might require shares to be allotted or Rights to be granted and the Directors may allot shares or grant Rights in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired. Registered Office 180 Piccadilly London W1J 9HF Special resolutions 7. THAT, subject to the passing of resolution 6 and in accordance with section 570 of the Act, the Directors be generally empowered to allot equity securities (as defined in section 560 of the Act) for cash pursuant to the authority conferred by resolution 6, as if section 561(1) of the Act did not apply to any such allotment, provided WWW.ORIOLERESOURCES.COM 77 Notes: Eligibility to attend and vote 1. To be entitled to attend and vote at the Annual General Meeting (and for the purpose of determining the number of votes a member may cast), members must be entered on the Register of Members of the Company by 11:00am on 22 April 2022. Appointment of proxies 2. As a member of the Company, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. Appointment of proxy using hard copy proxy form 6. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be completed and signed and sent or delivered to the Company’s registrars, Share Registrars Limited, 3 Millennium Centre, Crosby Way, Farnham, Surrey, GU9 7XX, to be received by Share Registrars Limited no later than 11.00am on 22 April 2022. Proxy forms may also be emailed to voting@shareregistrars.uk.com 7. In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is signed (or a 3. A proxy does not need to be a member of the Company duly certified copy of such power or authority) must be but must attend the Meeting to represent you. Details included with the proxy form. of how to appoint the Chair of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chair) and give your instructions directly to them. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. 5. If you do not give your proxy an indication of how to vote on any resolution, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting. Appointment of proxy by joint members 8. In the case of joint holders, where more than one of the joint holder’s purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior). ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS78 NOTICE OF ANNUAL GENERAL MEETING CONTINUED Changing proxy instructions 9. To change your proxy instructions simply submit a Communication 11. Except as provided above, members who have new proxy appointment using the methods set out general queries about the Meeting should contact above. Note that the cut-off time for receipt of proxy Share Registrars Limited on 01252 821390 or by email appointments (see above) also applies in relation to enquiries@shareregistrars.uk.com (no other methods of amended instructions; any amended proxy appointment communication will be accepted). 12. You may not use any electronic address provided either in this notice of Annual General Meeting or any related documents (including the proxy form) to communicate with the Company for any purposes other than those expressly stated. Documents available for inspection 13. The following documents will be available for inspection during normal business hours at the Company’s registered office up until the date of the Annual General Meeting and at the place of the meeting from 11.00am on 24 April 2022 until the end of the meeting: ° the audited consolidated accounts of the Company for the financial period ended 31 December 2021; ° the Register of Directors’ interests in the capital of the Company and copies of the service contracts of the Directors of the Company. received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Share Registrars Limited. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. Termination of proxy appointments 10. In order to revoke a proxy instruction you will need to inform the Company using one of the following methods: ° By sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Share Registrars Limited, 3 Millennium Centre, Crosby Way, Farnham, Surrey, GU9 7XX. ° In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. ° Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. In either case, the revocation notice must be received by Share Registrars Limited no later than 11.00am on 22 April 2022. ° If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid. Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. WWW.ORIOLERESOURCES.COM ADVISORS & OFFICES Nominated advisor Grant Thornton UK LLP 30 Finsbury Square London EC2A 1AG Group Auditors PKF Littlejohn LLP Statutory Auditor 15 Westferry Circus Canary Wharf London, E14 4HD Brokers Shard Capital Partners LLP 23rd Floor 20 Fenchurch Street London EC3M 3BY Group Solicitors Edwin Coe LLP 2 Stone Buildings Lincoln’s Inn London, WC2A 3TH Bankers Lloyds TSB Bank plc High Street Slough Berkshire, SL1 1DH 79 Registered Off ice 180 Piccadilly London W1J 9HF UK UK Exploration Off ice Oriole Resources PLC Wessex House Upper Market Street Eastleigh Hampshire, SO50 9FD UK Turkish Off ice Stratex Madencilik Sanayi ve Ticaret Ltd. Sti. Çukurambar Mahallesi 1458. Sk. Elit Apt. 1716 Çankaya Ankara Turkey West Af rica Off ice Stratex EMC SA c/o Energy & Mining Corporation S.A. Sacré Coeur 111/VON No 9231 Dakar BP. 45.409 Senegal ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021FINANCIALS80 GLOSSARY Term Au breccia Cu cut-off dyke felsic g/t granite greenstone belt hydrothermal solution Definition Chemical symbol for gold. A rock composed of sharp-angled fragments embedded in a fine-grained matrix. It can also be used to describe localised areas of sharp-angled fragments within a fine-grained matrix within any rock type. Chemical symbol for copper. The lowest grade value that is included in a resource statement. It must comply with JORC requirement 19: “reasonable prospects for eventual economic extraction” the lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. It may be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification. A tabular body of intrusive igneous rock emplaced vertically or at a steeply included angle to the horizontal and usually cross-cuts the host rock. A general term used to describe an igneous rock that contains an abundance of ‘light-coloured’ silicate minerals such as quartz and feldspar. Also defined by a silica content of > 69%. Grammes per tonne, equivalent to parts per million. A medium to coarse grained igneous rock that is rich in quartz and feldspar minerals. Granites are the most common ‘plutonic’ rock in the Earth’s crust, formed by the cooling of magma at depth. An area, typically in Precambrian shields, occupied by igneous (± sedimentary) rocks of variable compositions that have been subjected to ‘Greenschist facies’ metamorphism and defined by the presence of green-coloured metamorphic minerals such as chlorite, epidote and actinolite. Globally, ‘greenstone belts’ host district scale economic mineralisation for a range of commodities including gold, silver, copper, zinc and lead. Typically a high temperature saline solution that is capable of dissolving a wide range of elements including economic metals such as gold, silver, copper, zinc, and lead. The movement of hydrothermal solutions through the Earth’s crust enables transportation of economic metals/ minerals and are generally required to form mineral deposits e.g. orogenic gold deposits. igneous A term used to describe rocks that have solidified from lava or magma. indicated resource inferred resource JORC limestone mafic metamorphic metasediment The part of a Mineral Resource for which tonnage, densities, shape, physical characteristics grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed. The part of a Mineral Resource for which tonnage, grade, and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability. The Australasian Joint Ore Reserves Committee Code of Reporting of Exploration Results, Mineral Resources and Ore Resources, 2004 (the ‘JORC Code’ or ‘the Code’). The Code sets out minimum standards, recommendations and guidelines for Public Reporting of Exploration Results, Mineral Resources and Ore Resources in Australasia. A sedimentary rock made from calcium carbonate (CaCO3) usually in the form of calcite or aragonite. Limestones typically form at or below the seafloor when calcite and/or aragonite precipitates out of water containing dissolved calcium. A general term used to describe an igneous rock that contained an abundance of ‘dark coloured’ minerals such as olivine, amphibole, pyroxene, and biotite. Also defined by a silica content of between 45 and 52%. A term used to describe a rock that has undergone transformation typically by a combination of heat and/or pressure conditions, or other processes, that were significantly different from those encountered at the surface of the earth. A term used for a metamorphic rock formed when a sedimentary rock undergoes partial or completed recrystallisation under conditions of temperature and pressure that were significantly different from those encountered at the surface of the earth. WWW.ORIOLERESOURCES.COM 81 Term mineral resource Definition A concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated, or interpreted from specific geological evidence, into Inferred, Indicated and Measured categories when reporting under the JORC Code. moz Million troy ounces. orogenic gold deposits A mineral deposit type formed from hydrothermal solutions at depths of between 6,000 and 20,000m and in the temperature range of 300-550˚C. Typically these deposits are controlled and shaped by the structural deformation that occurs during mountain building events known as orogenies. oxide gold oxide zone oz porphyry schist sedimentary shear zone silica sulphide gold sulphide zone tonalite Gold mineralisation that occurred within the ‘oxide zone’ as free gold. A zone of weathered rock occurring at or close to the Earth’s surface. Troy ounce (=31.103477 grammes). A general term for any igneous rock in which relatively large crystals (phenocrysts) constitute 25% or more of the volume and are set in a fine-grained ground mass. Can also be used in conjunction with a mineral where the rock is rich in that component or rock descriptor where appropriate e.g. quartz-feldspar porphyry. A general term for a medium grained metamorphic rock defined by the presence of schistose texture, which is where elongate minerals are aligned into thin, often repeating, parallel layers. Can be used in conjunction with a mineral or rock descriptor where appropriate e.g. quartz- pyrite schist or mafic schist. A term used to describe a rock that has formed by the accumulation of deposition of minerals and/or organic particles at the Earth’s surface followed by cementation. A tabular zone of rock showing evidence of shear stress i.e. a stress field that is acting parallel to a plane passing through any point in the body. Shear zones are a common feature of orogenies and present a structural control that can be favourable for the formation of orogenic gold deposits. A white or colourless crystalline compound (SiO2), occurring abundantly as crystalline quartz. This term also includes materials such as sand, flint, agate, and many other industrial related minerals used in the construction of glass and concrete etc. Gold mineralisation occurring within the ‘sulphide zone’, can occur as both free gold or locked within the sulphide crystal structure. Un-weathered rock occurring below the ‘oxide zone’ and containing metal-sulphide minerals. An igneous rock composed of crystals that are clearly visible to the naked eye and defined by a composition of greater than 20% silica. tonne (t) 1 million grammes. ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021Phone: +44 (0)207 830 9650 Fax: +44 (0)207 830 9651 Email: info@orioleresources.co.uk www.orioleresources.com 180 Piccadilly, London, W1J 9HF O R I O L E R E S O U R C E S P L C A N N U A L R E P O R T F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 2 1 

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