Mariana Resources (LON:MARL) – BUY*: Upgraded rating to BUY
Market Cap: £15m; Current Price: 1.75p; Target Price: 4.8p
Introduction of forecast and price target of 4.8p
NORTHLAND CAPITAL PARTNERS VIEW: Mariana Resources has had a transformational year with the discovery of ultra-high grade gold and copper mineralisation over large intercepts at the Hot Maden Project, located in Turkey. In just six months since its discovery, Mariana and its joint venture partner Lidya have advanced Hot Maden to a maiden mineral resource estimate of an impressive 2.9moz of gold equivalent at an exceptional gold equivalent grade of 10.9g/t Au (NCP calculation based on current prices, reported estimate is 3moz Au eq. at 11.2g/t Au eq.). The definition of the maiden mineral resource estimate at Hot Maden is an important milestone for the Company and one that allows us to introduce forecasts and a valuation of the Company, as a result, we have upgraded our SPECULATIVE BUY rating to BUY. The potential upside to Mariana’s share price is reflected by a comparison with a basket of other companies that have interests in other ultra-high grade deposits that vary in development stage from resource to production. The ultra-high grade peer group’s valuation per ounce of gold equivalent on average is £61/oz Au eq. with some as high as £146/oz Au eq. Mariana currently trades on a multiple of £17/oz Au eq.. Considering the very fast progress made to date and our continued expectations regarding the pace of progress at Hot Maden, with a resource upgrade and a preliminary economic assessment (PEA) likely before the end of 2016, there is much for investors in Mariana to look forward to in the coming year. We have introduced forecasts for FY15 and FY16 and a price target of 4.8p for Mariana Resources based on its peer group multiples. Our price target is fully diluted taking into account the increase in share capital that would occur from an equity financing in 2016 at the current market price.
Ariana Resources (LON:AAU): Red Rabbit Site Visit Report
Market Cap: £7.1m; Current Price: 0.89p
NORTHLAND CAPITAL PARTNERS VIEW: We recently visited Ariana Resources’ Red Rabbit Gold-Silver Project, located in western Turkey, where mine development is underway. The Red Rabbit Project is fully funded through a US$33m facility with a Turkish bank and a further US$4.5m from joint venture partner Turkish construction company Proccea Construction Co. that is earning a 50% interest in the holding company (Zenit). Red Rabbit is expected to commence production in H216 producing an average of c. 18,500oz Au eq. over an eight-year mine life. At a gold price of US$1,174/oz Au, the project has a pre-tax NPV10 of US$21.5m and an IRR of 30.3%. Our site visit focused on the Kiziltepe Prospect where we viewed the Banu Vein, Arzu South, Derya Vein and Arzu North deposits from which the joint venture partners will produce the c. 148,000oz Au eq. at an average grade of 3.6g/t Au eq. over the life of mine. With its large land holding Ariana has significant potential to expand on this initial production rate.
URU Metals (LON:URU) – CORP: Placing
Market Cap: £1.3m; Current Price: 0.55p
From Friday: URU Metals raises £400,000
URU Metals has raised £400,000 at a price of 0.4p per share through the issue of 100,000,000 new shares.
Following the placing the Company will have 328,960,379 shares in issue.
NORTHLAND CAPITAL PARTNERS VIEW: URU Metals will use the proceeds of this placing to advance its 100% Zebediela Nickel Project located in South Africa and general working capital. A drill programme is planned to commence in November with results expected in January, metallurgical studies are also expected to be completed.
Thor Mining (LON:THR) – CORP: Quarterly report
Market Cap: £1.8m; Current Price: 0.042p
From Friday: Potential sale of Spring Hill
- Following its acquisition of the outstanding interest in the Spring Hill Gold Project, Thor has received a number of unsolicited offers and proposals to purchase the project. Thor has advanced discussions with one party, these negotiations are not complete and terms have not yet been agreed.