Oriole Resources (ORR.L) has confirmed IAMgold (IMG.TO, IAG) has completed the required US$4M expenditures to establish an initial 51% stake in the Senala gold project in Senegal. The company is currently reviewing all the documentation provided by IAMgold but it seems to be just a matter of time before Oriole signs off on everything (Oriole has already approved the request and the ‘route to formalizing’ is now being reviewed) and IAMgold officially earns its 51% stake.
IAMgold also appears to be encouraged by the exploration results as it has notified Oriole it has commenced the second part of its option agreement. An initial US$1.5M auger drill program commenced earlier this quarter and is likely completed by now. This auger drill program aims to test the shallow zones at Faré as the average depth per hole will be just 8 meters.
By spending an additional US$4M on exploration, IAMgold can further increase its stake in Senala to 70%. Upon completing the earn-in agreement, IAMgold will own 70% of the project while Oriole will be left with just 15% as the remaining 30% ownership in Senala is jointly owned by Oriole and its joint venture partner.
Disclosure: The author has no position in Oriole Resources nor IAMgold. Please read our disclaimer.
