Growing the Company

0:08 Hello. This presentation is put together to talk about growing the company, explaining the development of Oriel in the context of the most used industry valuation models and having explained that, give an overview of the investment opportunity provided by Oriel. We have our usual disclaimer. So, within Oriel, we have a number of projects, all at a comparatively early stage. Most advanced is our Sonala Gold Project in Senegal, where we have iron gold spending up to $8 million to earn 70%. Then we have Bibimi and Rapuzzi, the gold projects in northern Cameroon.

0:56 Bibimi, we obviously just completed our maiden drilling program, and Rapuzzi is slightly behind that, but very much in the same district. And then we have our newly acquired Central Cameroonian licenses, where we have multiple opportunities for success in district scale land packages. So we've got a lot of resources around the group. And this presentation is to show what I've set in the context of an industry standard theoretical model. Which is this, the Lassonde curve. This is a was invented by Pierre Lassonde back in the 1990s. And we mentioned it briefly in the recent Fireside Chat video.

1:44 But it's worth delving a little bit more into it. And basically on the horizontal scale, it takes a project and it's a project level model through exploration, evaluation, construction and into production. And obviously when you get to production, then the value of the project starts coming away as you deplete the asset. And then on the vertical side is value. And this is an approximation of share price effectively. So this is showing what should happen to the value of a share in an asset as it moves from exploration all the way through to production. And as you can see, it's quite an unusual looking shape in that you have this first hump at the evaluation stage.

2:34 And this is an iterative process as a project moves to sort of initial resource, extended resources, moves through the PFS stage, the PEA stage, and on up to feasibility studies. So it's really increasing the value of the project through defining the resource that is eventually going to get mined. And that obviously is at Oriel, this is the part of the curve that we're most interested in. And then we move beyond that into the next part, which is moving towards mine building. And it's actually quite an unusual looking curve at this point, because you've got this sort of decrease in share value all the way down to commissioning and then back up the other side once commissioning starts to mine production.

3:27 And really underlying this are 2 main factors. You know, we're talking about share price, but really you've got market value of the project and number of shares in issue effectively. That's what would be driving share price on this. And using those 2 parameters, we can sort of reverse engineer the Lausanne curve to give us an idea of what's actually going on to give us this quite unusual shape. So this is the project value curve, which is actually a sort of flatter version of the Lausanne curve. And it's based on a theoretical project. So I've just constructed this from a theoretical project which would be 1 million ounces of gold, a 150 million pound mine build, a 1300 pound gold price and an all-in sustaining cost of 60%.

4:20 And building that gives this project value line, which is driven really by 2 main facts. And the 2 main facts are, on day 1, when nobody spent anything, this project's worth nothing. But on the first day of mining, it's actually at its main, its utmost value. At the end of my first day of mining, all the costs of getting there have been spent and all you've got left is the mining of the resource. And, you know, times 1 million ounces by 1300 gold price and an all in sustaining cost of 60%, you get 520 million sterling value of the mine on day 1.

5:08 So, that's really the top point of the curve and then everything else can kind of flow into that a little bit. I mean, it's pretty simplistic because I'm ignoring things like discounted cash flows, I'm ignoring tax, expansion of the resource, changes in gold price, just really for simplicity of illustrating the model. Now, we have built a little fat into this because, as I mentioned, we have an all-in sustaining cost of 60%. Now, that would be, that would work out in this model of £780 per ounce of gold. And the actual industry average at the moment is more like 700 pounds per ounce of gold. So, you know, we've built a little bit of fat in to reflect the fact it's a simplistic model.

5:58 But at a macro level, I think it kind of works to illustrate what's going on with the project value. And the point of that is really that, you know, we've gone from naught to 520 million. Now, as as an explorer and as I'm sure many of our investors would like, Unfortunately, this isn't a straight line between naught and 520 million. There's quite a lot going on in this curve. To do that, there's 2 main things that have happened, really. Speculative investors have come in and backed the junior explorer to go and find a resource and prove an economic case for that resource. And then basically, they've handed over to a financier group or a major gold miner to build the mine, basically.

6:50 And this is why you have this sort of fall off in value. The speculative investors have found this resource. It's 1 million ounces of resource. They know it's worth 520 million. They might have a good idea that mine construction cost is going to be 150 million, for example. And initially, they'll be thinking, well, this resource should be worth therefore 300 million. Obviously, that won't happen. The financiers are gonna wanna make a profit on it. So you can't drive the value of the project, all the way to 300 million, but you get a significant uplift in value of the project as you move through that evaluation curve. And this is what's known as the orphan period in the project.

7:43 The speculators want to get out and the financiers are not quite ready to get in. So, the share price will drift a bit until, effectively, what happens is the financiers and competition amongst them to build this mine will firm up a price and the speculators will get out at that point. Once the finance is sorted, construction can begin. And as you can see from the steepness of that curve, pretty much every million spent is gonna be driving value of about 2 million, just based on this theoretical model. So moving through, this is actually the numbers I used to generate that graph. And, you know, being an early stage explorer, I concentrate on the early stage explorer exploration sites. We've got 4 phases of that, and then a phase of resource definition up to PFS and FS.

8:40 And the numbers we've used are basically just assumptions around how much money are we gonna need to do each of the phases, how much value are we gonna create at each phase, using the 1 pound share price, how much capital is gonna be required, because we need to understand how many shares are gonna be issued in building this thing. And then the key number obviously is when, on day 1 of the mine, it's theoretically worth 520 million. And as you can see, the number of shares that get issued, The share price has 2 major drivers, defining the resource where the share price will rise substantially, and then getting to the mine development.

9:28 And Effectively what you get is, in this example, 7 million shares, 12 million of capital needed to get to feasibility study, 7.7 million shares, at about 1.56 per share average, whereas the construction cost of 150 million will be provided by 14 million shares at an average of £10 per share. So effectively, the speculators, who have taken all the risk of defining this resource, are going to get a multi-X return on the investment. And the financers who are taking significantly less risk will still also get a pretty good return because they're sort of driving the building of the mine. So, and in many ways, you know, you can argue about any of these costs quite easily.

10:22 It doesn't really matter in some ways. If you accept that this million ounces of gold is gonna be worth 520 on the first day of the mine, and you accept the shape of the curve, then you're arguing about, you know, should that be 1 million, should that be 2 million? It doesn't really matter. It's a model that fits the Lausanne curve effectively and Lausanne curve's been pretty well proven through its history. So this little graph just basically takes all those numbers and puts the project value, which we already looked at, against the Lausanne curve that's being driven by those numbers of shares that I talked about. And as you can see, they're pretty much the same shape, but the Lassonde curve, especially in the exploration phase or the evaluation phase is much more pronounced.

11:15 The value being added during that phase compared to the number of shares in issue drives significant value growth for the shareholders. So what does this mean for Aurea? Well, all our projects are in that first quarter of the Lassonde curve, the exploration stage. And what we're doing is moving them systematically towards the evaluation stage. And proving successfully initial resources on those projects and pushing them further up the curve, we'll naturally see an uplift in value through that evaluation phase. And potentially a pretty significant uplift in valuation as well. Interestingly, I've also superimposed our recent share price. This is our 3 year share price.

12:04 And bizarrely, if it looks like the first half of the Lausanne curve but it isn't. You know it's all it really is is you know our projects are still in that exploration phase so you know later on we'll talk about what that share price is, graph is meaning, but it might look like the Lassonde curve, but it isn't a Lassonde curve effectively. So moving on through the projects, you know, Sinala is the project that is at its latest stage, its most advanced stage. It's 472.5 square kilometers in the KK inlay in Senegal. I'm currently subject to an earning by Iron Gold, who is spending 8 million to earn 70%.

12:52 We've got 5 targets on this license, and we recently secured it for another 10 years. So you know, we've got a big license in what is a very hot district for gold exploration. There's an estimated 45 million ounces of gold across the KK and Lyre. And then, you know, we've got a very good central position on it. Now, once we, at one time, we'll reach that 70% ownership position, we'll actually have a 25.5% holding with our local partner holding 4.5%. We've then got the potential to sort of contribute or dilute, And if we contribute, we'll probably get the opportunity to contribute our partner's share as well. So we can start building back up to a 30% stake in this.

13:42 And it's got 5 targets on the license. Faray is the most advanced, and Iron Gold have recently been drilling at Farae and Medina Bafe, Medina Bafe, which is in the south of the license and very close to their boat and mine development. So Farae, taking a look at Farae, and not wanting to get into the geology too much, you know, we've got a plan and a cross section of Farae here. We've had interesting, you know, When we worked this ground before we passed it over to Irongold, the JV of Irongold, we had significant intersections here, you know, 100 metres of good grade. And this cross-section here is sort of a good example of what we could do there in terms of a standalone open pit resource at Farae.

14:40 We're currently awaiting results from the recent drilling. And The more information we get on Faray, the closer we get towards edging it into a sort of initial resource estimate and moving it into that second phase of the Lausanne curve. And what that would actually mean for us, if Faray, This is just pushing the ownership structure of Fari into that theoretical million ounces that we used on the Lassonde curve example. You know, if we push the ownership structure in, you know, by PFS stage, Fari could be worth kind of 30 to 40 million pounds to us, you know, if it had 1 million ounces. And, you know, we would also have the opportunity to keep going. And if we got it, if we went all the way and maintained our stake to mine build, you know, Based on that exact same theoretical resource, it would be worth 100 million sterling.

15:41 So Farah itself is a very interesting asset for the company. And there's 4 other targets on the Sonala license that have all got potential. It's such a hot gold district, You don't actually need 1 million ounces here, we don't think, to end up mining it, because there's so many mines and mine development projects around that Medina Baffi being a case in point, so close to Boto that a few hundred thousand ounces would be chuckable and get you there. So there's great potential for resource definition at far a driving value for the company. I'm flipping over to Cameroon.

16:30 You know, we've got the Bibbimi and Wapusi licenses. Bibbimi is the most advanced of them, which has finished the maiden drilling program. We've got 8 kilometers of anomalous gold and 4 key targets, forming targets, which all drill tested during the drilling program and all came back with gold as well. So, you know, 4 good follow-up targets. Wapuzi itself, which is, you know, a similar system, a bit earlier stage exploration, we've really only done soil sampling and a little bit of trenching up at Wapusi. But it's only 20 kilometers away. So you see the potential for bringing these together into a sort of shared position, maybe an open pit and a satellite deposit, something like that.

17:18 And the potential of it is probably illustrated best by what we found in the maiden drilling program at the Pugassi Zone 1, where the most obvious and immediate area we want to do some follow-up work on is highlighted in red on this map, on this plan map, and it's between 2 fence lines 800 metres apart, good intersections, good grades across the fence lines, open to the north and south and open at depth. So, you know, we really want to get back in there and do some more work to, you know, to start pushing this forward as quickly as we can towards sort of a maiden resource in our Northern Cameroonian licenses.

18:06 And then the third route to a significant value uplift would be our Central Cameroonian licenses which we had confirmed in February this year. Nearly 3,600 square kilometers, which we know from historical data is prospective for gold. And this was further confirmed when We had our first trip to them and found artisanal miners working on them, which proves its goal there. It's very well positioned on the Chilani, Banya, Chia zone. And we consider it to be a great district scale play. We're waiting for stream sediment results coming through from the 5 eastern most licenses.

18:59 But in terms of scale, I mean, this area is about half the size of that KK inlier in Senegal we talked about earlier. That's got a gold endowment of 45 million ounces, so you've got half the size of it here. Plenty of potential for 1 million ounce deposit to be in our central Cameroonian license package. And obviously we talked about the Lassonde curve as a sort of predictor of value, the way it should work as we move through resource definition. And then, you know, at a project level, and anything you look at online, this is a lovely smooth curve. When you apply it to looking what's going on in the real world, you know, you get it very much distorted.

19:50 The smooth line disappears behind AIM company trading patterns, this kind of sawtooth of the share price. Other things can impact it, like resource situations, which is vitally important. It's likely that the 1st resource anyone announces on a license will then get added to, more work will be done. They'll, if it's open to the north, they'll do more extensional drilling and push the resource up. And that can be perfectly illustrated by Loncor Resources, which have had multiple resource situations at their project, and very much still in the resource definition phase. But as you can see, every time they up the resource, share price rises and pushes up nicely.

20:37 And they're just building carefully through that resource definition phase to the top of the first peak of the Lassonde curve. Then you have multi-project companies, of course, Oriel's a multi-project company. Another one would be Ariana Resources, a mine operator in Turkey but also with exploration targets. You can, no prizes for guessing when they announce a new resource on a new exploration license, you know, significant uptake in value. Maybe not quite as pronounced as, you know, You can see from long cars, low point to the high point. But that's because they've already got a operational line in there. And the point of that is, a multi-project company is effectively got 2, 3 or 4 Lassonde curves running at all the same time and you know you might have certain projects in the orphan period and certain projects going through the evaluation period so it can be a little bit of a mishmash of forces at play on the share price.

21:43 And the impact of the trading patterns on the nice clean curves of the Lausanne curve is very much illustrated by our own share price. This is a graph I put up earlier but I've repositioned the the Oriole share price graph into where we are in terms of the Lausanne curve. We're theoretically in this exploration side where it's a slow gradual value build. Our share prices had a pretty wild ride, but the point of this graph is really, compared to what would be expected, should we be moving through resource, extensional resource, PFS, PEA, feasibility study, You know, these are pretty minor fluctuations in the context of the bigger picture.

22:35 And that's clearly what we're working to achieve. So the investment opportunity, What it all means is fairly self-explanatory. We're gonna move through the evaluation phase, aiming to drive a significant uplift as we have successful projects. And we've got multiple opportunities for that to happen. We've got 10 licenses in Cameroon, covering a significant land package, plenty of evidence of gold across all of them. And then we've got the Sonala license in Senegal, where FARE is close to resource definition. And it seems to me that FARE and Sonala largely underpin the 10 million market cap we have at the moment. And that's before we even talk about the other assets we have in Turkey and East Africa.

23:35 And one of the keys to it is having an experienced team who understand the importance of systematic results-driven exploration. We need to move quickly. Standing still definitely costs money, and we need to explore as quickly as we can. But it needs to be systematic and it needs to be results driven. And by doing that we'll deliver shareholder value by delivering successful projects. And having an experienced team is absolutely vital. And I'm pleased to say that alongside me on the board, I have something like 100 years of geological experience, most of it in this type of industry, in this part of the industry.

24:21 So, you know, we've, by having that experience in that team, we've got, you know, every opportunity for success, but also understanding the options available as we push the projects forward, which is very key. There are parts of the Lusanka if you'd want to get off and being able to do so is something that this board can bring due to their wide industry experience. So, you know, I think we're pretty well placed for success and moving those projects along. So thank you