(Sharecast News) - West Africa-focussed gold explorer Oriole Resources announced a £1.45m write-down on its 24.94% interest in the privately-owned Thani Stratex Resources (TSR) on Friday, which in turn holds a 100% interest in the Hodine licence in Egypt.
The AIM-traded firm had reported on 19 October that Red Sea Resources (RSR) had spent $2.2m on exploration at Hodine, specifically at the Anbat project, but that it would not be exercising its option to acquire an 85% interest in the licence.
It said the decision was made on the basis that the exploration programmes had not significantly improved the existing 2017 inferred mineral resource estimate at Anbat of 209,000 ounces, grading 1.11 grams of gold per tonne.
Furthermore, the Egyptian mining authority EMRA concluded that the 2017 mineral resource estimate did not satisfy the definition of a commercial discovery under the country's mining code.
As a result, RSR forfeited its right to an 85% interest in the licence, and TSR resumed full control.
"With the licence due to expire on 31 December, and no possibility of extending its tenure, TSR has advised the company that it has now formally relinquished the licence," Oriole said on Friday.
"Accordingly, an amount of £1.45m, relating to the carrying value of TSR, will be written down in the company's accounts at year end."
At 1113 GMT, shares in Oriole Resources were down 2.78% at 0.11p.
Reporting by Josh White for Sharecast.com.
Oriole (ORR)