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In the news with RFC Ambrian: Mariana Resources

Published: 10:44 06 Oct 2015 BST

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METALS & MINING EQUITIES

MARIANA RESOURCES* (LON:MARL) — Discovery Hole 250m South of the Hot Maden Initial Resource Area Among High-grade Intercepts — The AIM-quoted exploration company focused on Turkey and South America has announced assay results for a further four drill holes (HTD-23 to -26) from the Hot Maden Project in north-eastern Turkey. HTD-24 was drilled as a resource extension hole above HTD-10, whilst HTD-23, -25 and -26 were drilled as exploration holes several hundred metres along strike to the south, as shown below.

Results from the new drill holes are as follows:

Resource Extension Drilling
• HTD‐24 intersected 36m at 22 g/t Au and 5.5% Cu from 22m downhole, plus 7.5m at 2.2% Zn from 98m downhole

Exploration Drilling
• HTD-25 intersected 25m at 7.3 g/t Au and 0.5% Cu from 43m downhole (including 9m at 18 g/t Au at 0.6% Cu from 45m)
• HTD-23 intersected 20m at 1.1% Zn, 29m at 1.8% Zn and 3m at 7.6% Zn from 21m, 66.5m and 127m downhole respectively
• HTD-26 intersected 15.5m at 1.5% Zn and 12.5m at 4.1% Zn from 62m and 82.5m downhole respectively, plus 1m at 3.5 g/t Au and 0.4% Cu from 139m downhole

RFC Ambrian Comment: Whilst HTD-24 follows holes HTD-18, 20, and 22 (which encountered 108m at 3 g/t Au, 88.5m at 1.8 g/t Au and 44m at 7.7g/t Au respectively) in extending mineralisation beyond the Initial Resource Area, it is also positive to see the strong gold intercepts encountered by exploration hole HTD-25. Drilled 250m along strike, this hole represents the first to encounter high gold/copper grades to the south of the Initial Resource Area.

The Maiden Resource for the Hot Maden Project, as reported in August 2015, stands at 3Moz Au Eq at a gold equivalent grade of 11.2 g/t (on a 100% basis), comprising:

  • Indicated — 1.52 Moz Au and 102,000t Cu (2.03Moz Au Eq)
  • Inferred — 0.64Moz Au and 65,000t Cu (0.97Moz Au Eq)

Mariana has a 30% interest in the project, with JV partner Lydia holding the remaining 70%.

The resource extends over a strike length of 280m, and has a maximum width of 105m. This compares with the roughly 4km length of the alteration corridor, as shown below, and the approximately 800m strike length area over which drilling is now being undertaken. We therefore highlight the extent of the scope for further testing over the project area, with land permits for new drill sites having been obtained to enable additional drilling to the south of the Resource Area.

Concurrent with further step-out drilling to the south, metallurgical testing is additionally planned to map out the most effective processing path for the high-grade Hot Maden ore, which should assist in the preparation of a PEA for the project.

Mariana’s JV partner Lydia has now spent the US$2.5m commitment required to earn a 70% interest in the project, subject to a US$0.35m payment to Mariana. The company has stated that it will commit these proceeds directly to the Hot Maden Project, which, on a proportional basis inclusive of Lydia’s share, represents a total funding commitment of US$1.2m. The company believes this should cover exploration expenses at the project to end-2015.

At yesterday’s closing price of 2.1p, Mariana had a market cap of £16.0m/US$24m. Placing an assumed range of values on the company’s portfolio of other exploration interests (ie, excluding Hot Maden) of US$0-8m would result in a current market value for the company’s 30% interest in Hot Maden of US$16-24m, equivalent to US$18-27/oz Au Eq in the initial resource. We consider that this continues to be an attractive valuation given the scale and quality of the current resource and the potential for further additions in the immediate area of the resource and along the Hot Maden fault zone.

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