Mariana Resources: Las Calandrias draws admiring glances as company bids to unlock its potential

The news from from Mariana Resources (LON:MARL) will come thick and fast over the next weeks and months, with drilling results and a maiden resource for its Las Calandrias gold-silver project in Argentina providing plenty of interest for investors.

It has a position in the Deseado Massif region of Argentina that is making the mid-tier and major gold producers sit up and take notice. 

And with all the land now staked in this newly emerging gold area, the only way for the big boys to get in on the action is to deal their way in.

  

The point is not lost on chairman John Horsburgh, who has seen interest in his project grow.

“We have had lots of visits – including major companies,” he says without giving away their identities.

 "We know there is a lot of interest. But we still have lots of targets to drill and we are well funded.

“We are explorers and developers. Our aim is to find as much as we can with numerous targets ready to drill but in reality there is a lot of exploration here when compared with other gold-bearing domefields.” 

From a company and investor standpoint the most lucrative strategy at this stage of development must be to continue with an ambitious drilling programme that adds to the initial resource base.

From almost a standing start in September, the company has carried out a 30,000 metre programme. A total of 212 holes have been drilled, with the company waiting for the results of the final 22.

Las Calandrias is divided into two distinct areas: the low grade disseminated gold-silver discovery called Calandria Sur and the nearby high-grade La Calandria vein system.   

Both discoveries are open and possible extensions will be targets in the next campaign.  Then there are other vein systems, with “good sniffs” that have been only partly tested.

Interestingly, Calandria Sur butts up against the Escondido project owned by Mineral IRL (LON:MIRL), which is also quoted across here on AIM.  

“It is clearly a contiguous deposit, so a likely scenario would be an integrated bulk tonnage mining operation.  

“It’s still early days but we could be looking at a combined strike length of at least 1.5 kilometres,” says Horsburgh.

  

“So it will come together in some form or other. It will be interesting to see what our neighbours come up with in their own recent drilling at Escondido.  

“Also, Extrorre could be in the mix with a bulk-tonnage style gold discovery at Falcon, only  six kilomtres north-east of us.  

“At the moment everyone is trying to maximise what they have.”

The publication of the company’s maiden NI 43-101 compliant resource statement is a central plank to building value.

  

Horsburgh expects it to be finalised soon and out in public domain within the month. 

And while it is running a tad behind schedule, there is good reason for this.

“It has been extended to include the La Calandria vein,” says Horsburgh.

“Our milestone target? Well, we'll have to wait for the study but we have some internal ideas on that, considering the discovery was only made about a year and a half ago.”

One of the two drill rigs moved south-west to Sierra Blanca, and the other stood down until August, enabling Horsburgh and his team to better plan the next drilling campaign.

  

And there is plenty to mull over. However the results of from the final 22 holes which are expected soon could be key what happens next at Las Calandrias.  

For example, the search for potentially high grade feeder zones at Sur will be interesting and the Mariana exploration team now knows the gold-silver mineralisation is not just restricted to rhyolites but can be hosted in the surrounding volcanic rocks.  

This could open up yet more prospective target areas, particularly east of Calandria Sur.

In fact it is an incredibly busy period for Mariana. It recently published some encouraging early drill results from the Sierra Blanca project, also in Argentina, where the company holds a 70% stake with an option over IAMGOLD’s remaining 30%.

“The first results showed we could well be dealing with a strong open ended vein system with good silver-gold potential,” Horsburgh says.  

“Unlike the previous campaign, we’ve had good core recoveries so can look forward to the next results, due shortly, with more confidence.”

It is likely the company would exercise its option if the results are positive. 

The current programme, though ambitious, has barely scratched the surface of the company’s flagship project.  

Exploration to date covers only a small portion of its land holding in the Deseado Massif which totals 140,000 hectares.  

Mariana in its latest presentation produces a wonderfully informative prospect pyramid which gives the clearest indication of what is to come. 

It covers everything from possible extensions of known deposits, advanced drilling of other high grade vein targets to scout drilling of new targets.

Meanwhile, there are four potential unexplored dome complexes in areas to the north of Las Calandrias that look interesting.

Not that Mariana should be seen as a one trick pony. As well as Sierra Blanca, there is the Los Amigos gold project also in the Deseado Massif, where Hochschild is the operator and it is active in Chile via its iron oxide-copper-gold joint venture with Cliffs Natural Resources of the US.  

Last year the company raised just short of £15 million in two tranches, which has bankrolled the ambitious six-month drilling programme on Las Calandrias and other key projects.

According to Horsburgh there is still around £9 million “in the till”, which at the current burn-rate would fund the company through to the end of the year.

 

The chairman remains tight-lipped as to when Mariana will come back for more cash, or indeed how much it might look to raise.  

This will in part depend on the company’s imminent listing on the Toronto Stock Exchange and the drill results up to the end of the third quarter.

Aside from being a potential source of future funding, the TSX ought to bring another benefit – a rerating of the shares.  

Where here in the UK, gold and silver exploration in South America sounds risky and exotic, it is much better understood by the Canadian investment community.

“The TSX move will bring Mariana into line with peer juniors exploring in Santa Cruz and the North American mid-tiers,” Horsburgh says.

This ought, one should imagine, have a trickle back effect on the price of the stock listed here on AIM. If not there are plenty of potential value triggers such as the maiden resource statement and awaited drill results.

“We have come a long way in a short space of time,” concludes Horsburgh. “But there’s more to come.”