Mariana is a gold-focused exploration company which is working towards becoming a mining royalty company. Mariana?s plan is to discover economic prospects and farm out their development to well capitalised mining companies, in return for royalty payments on future production. Mariana is a geology and discovery driven business, so it comes as no surprise that four of five of the company?s directors are geologists. A quick shufti at the company?s website tells us that the company has about fifteen projects. This is good news as a royalty mining company needs a pipeline of prospects to increase the chances of a good number of them coming up trumps, going into production and generating those lovely royalties. The wildcard in this set-up is that while the company?s geologists are churning their way through stacks of prospects they stand a chance of discovering something really big; big enough to attract the attention of a major mining company that may develop an uncontrollable urge to offer Mariana?s shareholders large amounts of money for their shares.
Looking at the five directors CVs on Mariana?s website, the word ?exploration? appears ten times, but more importantly the words ?discovery? and ?development? each appear five times. Other important words that crop up are ?Brocks Creek gold mine?, ?El Valle gold discovery?, ?Rio Narcea mine?, ?Rio Blanco gold discovery?, ?Pallancata silver-gold discovery?, ?Dos Amigos copper mine?, ?Sunrise gold deposit? and ?Wadi Medden gold mine?. These are projects that the directors have been instrumental in discovering and/or developing, and five of these credits go to Managing Director -John Sutcliffe BSc, ARSM, FGS, MIMM, C. Eng. John is a very experienced exploration geologist and a South America specialist - his credits include discoveries and mining operations in both Ecuador and Chile. He has nearly spent four decades working in Latin America for major mining companies such as Anglo American, Shell-Billiton, International Minerals Corp and Antofagasta.
So, if you buy the Mariana Resources concept you are ?buying? the directors ? the kind of directors who are going to get out there in the back of beyond of Ecuador, Argentina and Chile and ?kick rocks? ? rather than sit in the office sipping cappuccinos and dreaming up press releases about strategic reviews and share price initiatives. Indeed, long-term holders of Mariana stock would like to see Mr Market take some initiative with regard to Mariana, as the company?s share price has halved since the company was floated on AIM and Mr Market seems to be overlooking the Mariana story.
Mariana already has some joint venture partners including: IAMGOLD (TSX: IMG, NYSE: IAG) with a market cap of around £1,175 million, Apex Silver Mines (AMEX:SIL) with a market cap of around £446 million, Dynasty Metals and Mining (TSX: DMM) with a market cap of around £93 million. In Chile, Mariana has a joint venture with Empresa Minera de Mantos Blancos (EMMB). This company is a subsidiary of mining giant, Anglo American, which is listed on the JSE South Africa, the SWX Switzerland, the Botswanan and Namibian stock exchanges - as well as the NASDAQ and the London Stock Exchange (LSE: AAL) - and has a market cap of £31,057 million! So these joint ventures tend to confirm the quality and reputation of Mariana?s directors ? especially when you consider that Mariana Resources has a measly market cap of £4.58 million.
Chile is the largest producer of copper in the world. There are dozens of copper mines in production in the highly prospective metallogenic belt that runs through the north of the country. In September, Mariana took an option on joint ventures for the Exploradora and Charango prospects with EMMB (Anglo American Chile). The joint venture terms bestow Mariana with rights to earn an interest of up to 70% by spending US$3 million over three years. So far, the Charango prospect has returned disappointing results with one drill hole intersecting some traces of silver lead and zinc. At Exploradora, Mariana?s option is on an Iron Oxide-Copper-Gold prospect, which consists of six concessions over 549 hectares. So far 400 metres of low-grade copper bearing skarn have been found here. (Skarn is a type of metamorphic rock which often hosts metal deposits that can include; copper, lead, zinc, iron, gold, molybdenum, tin, or tungsten.) Mariana will be hoping to identify a big target here, as the 3810 million tonne Olympic Dam deposit in Australia is the paradigm for an Iron Oxide-Copper-Gold deposit.
In Argentina, Mariana has a joint venture with IAMGOLD for the Sierra Blanca and Cañadon Largo concessions in the Santa Cruz Province, which is well known for its epithermal gold-silver prospectivity. Under the terms of this joint venture, Mariana can earn a 70% interest in the two properties by spending $2.0 million by October 2009. The Sierra Blanca and Cañadon Largo prospects cover a large epithermal vein system in a gold producing district. In the last few months Mariana has been channel sampling at Sierra Blanca and has released several cheery announcements.
The Veta Chala vein system is a swarm of quartz veins up to nine metres wide, located in the northeastern part of the Sierra Blanca property. The latest channel sample results at Veta Chala include 9.4 metres at 2,362 grams/tonne (g/t) silver and 1.29 g/t gold, and also 3.4 metres at 1,238 g/t silver and 0.1 g/t gold. The Veta Chala vein system is now known to be one kilometre long and up to nine metres wide, and it is open (continues) to the west - possibly extending under soil cover. The bulk of the twenty-five kilometres of the Sierra Blanca vein system remains under-explored. The Veta Chala vein system is now considered by Mariana to be a ?premium bonanza silver-gold target?. Mariana plans mechanised trenching and drilling as soon as permits are received.
In Ecuador, Mariana has three joint ventures. The Macara concessions are held in a 50/50 joint venture with Dynasty. At the Fierro Urco project, Apex Silver can acquire a 51% interest - initially by spending at least $200,000 in eighteen months. Meanwhile, the Norcay and Guanazan joint ventures with IAMGOLD are currently low priorities for both parties because of developments at Sierra Blanca.
In October, early work by Apex Silver reported bonanza-grade gold/silver vein assays from rock chip sampling at the Fierro Urco. Results included 34.5 g/t gold with 230 g/t silver from a vein 1.5 metres and 32 samples from nearby locations yielded samples ranging from 2.3 to 34.5 g/t gold and from 26 to 230 g/t silver. In November Mariana reported that a start had been made to 1,000 metres of diamond core scout drilling at the Macara gold project. High gold values had been found there in shallow artisanal workings, which included 2.5 metres at 19.3g/t gold and 0.7 metres at 42.5 g/t gold. The style of mineralisation at Macara is unusual and the purpose of the scout drilling to enable the geologists to gain some understanding of it.
So, in only eighteen months Mariana has developed an initial pipeline of prospects, one of them already looking credible, and has engaged the interest of credible joint venture partners. They say that ?actions speak louder than words? - on the third of December, Mariana raised £1.0 million in private placement, and the directors lifted their collective stake from 11.6% to 16.6% of the company.