TIDMMARL
AIM: MARL
TSX-V: MARL Granite House, La Grande Rue,
17 January 2017 St. Martin, Guernsey ,GY1 3RS
Channel Islands
Hot Maden High Grade Gold-Copper Project- PEA Results with a Positive
IRR of 153%
Mariana Resources Limited ('Mariana' or 'the Company'), the TSX.V and
AIM (MARL) listed exploration and development company with projects in
Turkey, South America, and Ivory Coast, is pleased to announce a highly
favourable outcome for a Preliminary Economic Assessment ("PEA" or the
"Study") of the high grade Hot Maden gold-copper project in NE Turkey.
The PEA was prepared in accordance with Canadian National Instrument
43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") by
independent mining consultant firm RungePincockMinarco Limited ("RPM").
Highlights of the Study (100% Project Basis)
-- Conceptual development for Hot Maden assumes an all underground mining
operation from a decline and utilizing mechanized transverse and
longitudinal long hole open stoping with engineered fill mining methods.
Mining and processing rates of 0.8 million tonnes per annum ("Mtpa"), 1.0
Mtpa, and 1.2 Mtpa were considered, with the base case mining scenario
being established at 1.0 Mtpa.
-- Total metal production of 2.6 Million ounces ("Moz") of gold and 142,000
tonnes ("t") of copper over a total project life of 9 years for the base
case mining scenario. Metallurgical testwork, through flotation and
concentration, completed to date on the high grade Main Zone
mineralisation has indicated high recoveries of both gold and copper. A
variable processing recovery, dependant on grade, has been applied in the
PEA resulting in a project weighted average recovery of 88% Au and 90%
Cu. The current Hot Maden plant flow sheet assumes the production of two
concentrates on site - one standard copper-gold concentrate, and a second
gold-bearing pyrite concentrate.
-- Post-tax discounted NPV for the base case mining scenario (1.0 Mtpa) of
US$1.37 billion ("B") excluding pre-development exploration costs (8%
discount rate).
-- Post-tax IRR for the base case mining scenario of 153% excluding
acquisition costs.
-- Total Capex (Initial + Sustaining) of US$261M
Note that the PEA is preliminary in nature as it includes inferred
mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them
to be categorized as mineral reserves. Mineral resources that are not
mineral reserves do not have demonstrated economic viability, and as
such there is no certainty that the preliminary assessment and economics
will be realized. A NI-43-101- technical report for the Hot Maden PEA
will be filed on SEDAR (www.sedar.com) within 45 days and also be posted
on Mariana's website (www.marianaresources.com).
The Hot Maden project is 70:30 Joint Venture between Turkish partner
Lidya Madencilik Sanayi ve Ticaret A.S. ("Lidya") and Mariana Resources
Ltd.
Chief Executive Officer Glen Parsons today commented:
"The potential value is finally revealed from the high grade Au-Cu Hot
Maden project with these PEA results from RPM. We have always believed
Hot Maden to be a world class deposit and, with a potential post-tax NPV
for the base case mining scenario of $1.37B and post-tax IRR of 153%,
this is certainly proven correct. The high grade nature of this
resource and relatively low capital (CAPEX) and operating (OPEX) costs
should result in the delivery of considerable cashflow and a short
payback period (around 2.1 years, including underground mine
development) on initial investment.
Despite Hot Maden's rapid advancement from discovery to PEA in just 20
months, the decision by the Lidya/Mariana (70/30) joint venture to
rapidly move to development is justified with the value of the project
for shareholders reflected in the significant cash flow generative
ability through the life of this initial current resource. The result is
expected to be a low cost, low environmental footprint, but highly
profitable mine.
A further 20,000m of drilling is budgeted and planned for this new year
and we must remember that exploration drilling continues to focus on the
discovery of new gold-copper resources at Hot Maden, especially to the
south of the Main Zone within the old "Russian Mining Area.
The Joint Venture will also continue to work on the technical studies
and optimisations required to underpin the Preliminary Feasibility Study
("PFS"), which is anticipated to be completed during Q3, 2017. The PFS
will provide higher confidence level mine designs, mineral processing
scenarios, and costings for the Hot Maden Project. Therefore this
result could change over time based on the updated prices, resource and
assumptions.
I look forward to updating the market on developments, as 2017 will
continue to be a busy period for Mariana."
PEA Parameters
Key parameters utilized in the Hot Maden PEA are indicated in the table
below:
Hot Maden - PEA Mining Base Case
Underground: underhand, mechanised transverse and
longitudinal long hole open stoping with engineered
Mining Method paste fill
Underground Minable Quantities 7Mt at 11 g/t gold and 1.9% Cu
0.8 Mtpa, 1.0 Mtpa, and 1.2 Mtpa were evaluated. Base
Annual Throughput case established at 1.0 Mtpa
Project Life of Mine 9 years
Gold Metal Price USD 1,250/tr. oz
Copper Metal Price USD 2.75/lb
Variable recovery based on the grade (project weighted
Gold Recoveries average recovery of 88%)
Variable recovery based on the grade (project weighted
Copper Recoveries average recovery of 90%)
Total Gold Ounces Produced 2.6M tr. oz
Total Copper Tonnes Produced 142kt
Upfront CAPEX USD 169M
LOM Project CAPEX USD 261M
Mining Operating Costs USD 31.05/t
Processing Operating Costs USD 15.13/t
G+A Operating Costs USD 10.18/t
The project was evaluated at a range of NSR COG's
from USD50/t to USD200/t. The base case economic outcome
was identified at an NSR of USD 100/ in situ tonnes
Net Smelter Return Cut-off Grades (this equates to an approximate Resource cut-off grade
(NSR) of 3.3g/t AuEq*)
Copper concentrate - TC:USD 101/dmt, Cu RC:USD 0.101/lb
payable Cu, 1% copper grade deduction, 96.65% copper
payability, Au RC:USD 8.5/tr. oz., 1 g/t grade deduction,
97.5% gold payability; transport to port :USD 8.50/wmt,
port:USD 10/wmt and shipping:USD 55/wmt. Pyrite
Smelting / Refining & Transport concentrate - TC :USD 30/dmt, Payment : USD100/dmt and 50%
Charges of gold content; transport to buyer :USD 5/wmt.
Royalties 2.6% State Royalties, 2% NSR Sandstorm
Corporate Tax Rate 20%
Geology and Mineral Resources
The high grade gold-copper mineralisation at Hot Maden occurs within a
N-NE-trending fault zone (the "Hot Maden Fault Zone") and is
sub-vertical in nature. At least two styles of gold-copper
mineralisation are evident within the Main Zone: i) the predominant,
multiphase quartz-sulphide (pyrite-chalcopyrite) +/- hematite/jasperoid
breccia bodies, and ii) semi-massive to massive sulphides
(pyrite-chalcopyrite). Host rocks are dominantly andesites and andesitic
breccias. Overall, the highest-grade gold mineralisation (typically >15
g/t Au but locally >100 g/t Au) at Hot Maden lies along the eastern
margin of the Main Zone. Drilling is ongoing but the current dimensions
of the Main Zone are a strike extent of 300 m from north to south, a
true width of between 50m and 70m, and a vertical extension from near
surface to >300m depth. Stratabound Zn(-Pb) (sphalerite-galena)
mineralisation also flanks the Main Zone to the east and locally to the
west. In the new Southern Vein Field discovery, host rocks are
dominantly dacitic breccias and gold-copper mineralisation is associated
with quartz-sulphide-bearing veins and vein breccias.
On July 25, 2016, Mariana reported an updated Mineral Resource for the
Hot Maden project. This Resource Estimate was prepared by independent
mining consultants RungePincockMinarco, and was based on assay results
received for holes up to, and including, HTD-62. The Mineral Resource
Estimate for Hot Maden included contributions from both the Main Zone
and a new Southern Discovery, and comprises (on a 100% basis):
Hot Maden Mineral Resource Estimate - Main Gold-Copper
Zone (2 g/t AuEq Cut-off)
Indicated Mineral Resource
Domain Tonnes Au Cu Zn AuEq Au Cu AuEq
t g/t % % g/t* Ounces Tonnes Ounces**
Main Zone LG 463,000 1.1 1.1 0.3 2.4 17,000 5,000 36,000
Main Zone HG 4,501,000 3.9 1.9 0.2 6.3 570,000 87,000 908,000
Main Zone
UHG 2,086,000 32.7 3.5 0.1 36.9 2,195,000 73,000 2,476,000
Mixed
Gold-Zinc 17,000 7.5 3.1 3.6 11.2 4,000 1,000 6,000
Peripheral
Lodes 60,000 2.1 0.4 0.4 2.5 4,000 5,000
Total 7,127,000 12.2 2.3 0.2 15.0 2,790,000 166,000 3,431,000
Inferred Mineral Resource
Domain Tonnes Au Cu Zn AuEq Au Cu AuEq
t g/t %% g/t* Ounces Tonnes Ounces**
Main Zone LG 395,000 1.7 0.9 0.03 2.8 21,000 4,000 35,000
Main Zone HG 31,000 3.9 1.6 0.1 5.8 4,000 6,000
Main Zone
UHG 6,000 39.1 2.1 0.01 41.6 7,000 8,000
Mixed
Gold-Zinc 4,000 1.7 0.4 2.4 2.2
Peripheral
Lodes 282,000 3.2 0.9 0.1 4.3 29,000 2,000 38,000
Total 718,000 2.7 0.9 0.1 3.8 62,000 7,000 88,000
Hot Maden - Southern Gold-Copper Zone (2 g/t AuEq
Cut-off)
Inferred Mineral Resource
Domain Tonnes Au Cu Zn AuEq Au Cu AuEq
t g/t %% g/t* Ounces Tonnes Ounces**
South Zone
LG 396,000 2.8 0.7 0.0 3.6 35,000 3,000 46,000
South Zone
HG 583,000 5.3 0.7 0.0 6.1 98,000 4,000 114,000
Main Zone
UHG 224,000 22.2 1.0 0.0 23.4 160,000 2,000 169,000
Mixed
Gold-Zinc 44,000 9.0 1.0 3.2 10.2 13,000 15,000
Peripheral
Lodes 104,000 1.9 0.3 0.0 2.2 6,000 7,000
Total 1,352,000 7.2 0.7 0.1 8.1 313,000 10,000 351,000
*Au Equivalence (AuEq) calculated using a 100 day moving average of
$US1,215/ounce for Au and $US2.13/pound for Cu as of May 29, 2016. No
adjustment has been made for metallurgical recovery or net smelter
return as these remain uncertain at this time. Based on grades and
contained metal for Au and Cu, it is assumed that both commodities have
reasonable potential to be economically extractable.
1. *-The formula used for Au equivalent grade is: AuEq g/t = Au + [(Cu % x
22.0462 x 2.13)/(1215/31.1035)] and assumes 100 % metallurgical recovery.
2. **-Au equivalent ounces are calculated by mulitplying Mineral Resource
tonnage by Au equivalent grade and converting for ounces. The formula
used for Au equivalent ounces is: AuEq Oz = [Tonnage x AuEq grade
(g/t)]/31.1035
In addition, a maiden Inferred Mineral Resource for the hanging wall
zinc zone of 2.8MT @ 4.0% Zn (2% Zn cut-off) was reported. However, this
zinc resource has not been considered in the current PEA, although
future technical studies will consider the potential economics of mining
this mineralised zone.
Mining Method and Mineral Processing
Mining of the wide, near vertical gold-copper mineralisation in the Hot
Maden Main Zone is expected to be undertaken through underground mining
using underhand, mechanised transverse and longitudinal long hole open
stoping (LHOS) with engineered fill mining techniques. The Stopes are
mined using an underhand extraction sequence (Top Down) utilising a
primary/secondary stope extraction methodology to exploit the grade
profile, which diminishes with depth.
The Hot Maden project is divided into two main areas, North and South.
The northern area consists of the wider portion of the ore body and as a
result is modelled predominantly transverse LHOS to maintain the
production rate. Some stopes less than 20m long and/or wide have been
developed longitudinally.
The southern portion of the mineralisation is thinner and has been
modelled in a longitudinal LHOS layout. This has been carried out so as
to reduce the amount of capital development required for access to this
mineralisation.
Access to the north and south areas are by independent declines. The
northern decline is accessed by a box cut portal whereas the southern
portal is an adit into the hill.
The PEA reviewed 0.8 Mtpa, 1.0 Mtpa and 1.2 Mtpa production profiles at
a range of NSR COG's from USD50/t to USD200/t. NSR was used instead of
the gold equivalent used in the Mineral Resource to capture the full
value of all mining blocks due to the relationship and variability in
grade, processing recoveries, concentrate recoveries and post gate
costs. The base case mining scenario was identified as 1.0 Mtpa, however,
an achievable optimum economic outcome was identified at a production
rate of 1.2Mtpa and NSR cut-off-grade of USD 100/ in situ tonnes (this
NSR cut-off equates to an approximate 3.3g/t AuEq cut-off grade).
A variable processing recovery, dependant on grade, has been applied in
the PEA resulting in a project weighted average recovery of 88% Au and
90% Cu. The current Hot Maden plant flowsheet has been demonstrated on
Life of Mine (LOM) composites with the production of two concentrates -
a typical copper gold rich concentrate (25% Cu and 85 g/t Au) and a
gold-bearing pyrite concentrate. The flowsheet is currently being tested
on 'Ultra High Grade' (UHG) composites. The incorporation of a gravity
concentrator has been included for gold ores in excess of 100 g/t Au.
Economics Summary- Throughput Analysis at cut-off NSR US$100/t
Payback
(Incl.
Mining Total After-tax NPV After-tax Development Mine
Scenario Throughput CAPEX At 8% Discount IRR - Yrs) Life
USD
Conservative 0.8 Mtpa 251M USD 1.28 B 130% 2.2 11
USD
Base Case 1.0 Mtpa 261M USD 1.37 B 153% 2.1 9
USD
Upside 1.2 Mtpa 271M USD 1.42 B 173% 2.0 8
Processing and Infrastructure Capital Costs
The processing plant and associated site infrastructure is estimated to
cost USD 80.1 million including contingency and owner's costs. Off-site
infrastructure is estimated to cost USD 45.2 million including
contingency.
Overall, the processing and infrastructure costs are estimated at USD
125.3 million.
Project Economics and Sensitivities
The project is most sensitive to changes in Metal price (namely combined
Copper and Gold prices), most significantly Gold price, processing
recovery and mining recovery.
**S**
Qualified Persons
The independent qualified persons responsible for preparing the Hot
Maden PEA are Mr Joe McDiarmid, MAusIMM(CPMin) of RungePincockMinarco
Limited, and Dr Andrew James Haigh Newell, MAusIMM(CPMet), MIEA (CP) of
RungePincockMinarco Limited. All of the aforementioned qualified persons
have reviewed and approved the contents of this news release.
The technical and scientific information contained in this news release
has been reviewed and approved for release by Eric Roth, the Company's
Qualified Person as defined by National Instrument 43-101 and for the
purposes of AIM rules. Mr Roth is the Company's Chief Operating Officer
and Executive Director and holds a Ph.D. in Economic Geology from the
University of Western Australia, is a Fellow of the Australian Institute
of Mining and Metallurgy (AusIMM), and is a Fellow of the Society of
Economic Geologists (SEG). Dr Roth has 25 years of experience in
international minerals exploration and mining project evaluation.
Forward Looking Statements: Some statements in this news release contain
forward-looking information or forward-looking statements for the
purposes of applicable securities laws. These statements include, among
others, statements with respect to proposed exploration and development
activities and their timing, resource estimates and potential
mineralisation, the PEA, including estimates of capital and sustaining
costs, anticipated internal rates of return, mine production, estimated
recoveries, mine life, estimated payback period and net present values,
opportunities to enhance the value of the Hot Maden and other plans and
objectives of Mariana Resources Ltd. These statements address future
events and conditions and, as such, involve known and unknown risks,
uncertainties and other factors, which may cause the actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the
statements. Such factors include, among others and in addition to those
described elsewhere in this release, delays in obtaining or inability to
obtain required government or other regulatory approvals, permits or
financing, the risk of unexpected variations in mineral resources, grade
or recovery rates, of failure of plant, equipment or processes to
operate as anticipated, of accidents, labour disputes, and unanticipated
delays in completing other development activities, the risk that
estimated costs will be higher than anticipated and the risk that the
proposed mine plan and recoveries will not be achieved, equipment
breakdowns and bad weather, the timing and success of future exploration
and development activities, exploration and development risks, mineral
resources are not as estimated, title matters, third party consents,
operating hazards, metal prices, political and economic factors,
competitive factors and general economic conditions. In making the
forward-looking statements, the Company has applied several material
assumptions including, but not limited to, the assumptions that:
required approvals, permits and financing will be obtained; the proposed
exploration and development will proceed as planned; with respect to
mineral resource estimates, the key assumptions and parameters on which
such estimates are based; that the proposed mine plan and recoveries
will be achieved, that capital costs and sustaining costs will be as
estimated, and that no unforeseen accident, fire, ground instability,
flooding, labour disruption, equipment failure, metallurgical,
environmental or other events that could delay or increase the cost of
development will occur, and market fundamentals will result in sustained
metals and minerals prices. The Company expressly disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise except as otherwise required by applicable securities
legislation.
The Company has concluded it has a reasonable basis for providing the
forward-looking statements included in this announcement. The detailed
reasons for that conclusion are outlined throughout this announcement.
The Company confirms that it is not aware of any new information or data
that materially affects the information included in the announcements
and that all material assumptions and technical parameters underpinning
the resource estimates continue to apply and have not materially
changed.
Glen Parsons (CEO) Mariana Resources Ltd +61 2 9437 4588
Eric Roth (COO) Mariana Resources Ltd +56 9 8818 1243
Karen Davies (IR) Mariana Resources Ltd (Canada) +1 604 314 6270
Rob Adamson RFC Ambrian Limited (Nomad) +61 2 9250 0041
Will Souter RFC Ambrian Limited (Nomad) +61 2 9250 0050
In U.K.
Oliver Stansfield Brandon Hill Capital (UK Broker) +44 20 3463 5061
Jonathan Evans Brandon Hill Capital (UK Broker) +44 20 3463 5016
Camilla Horsfall Blytheweigh (Financial PR) +44 20 7138 3224
Megan Ray Blytheweigh (Financial PR) +44 20 7138 3203
About Mariana Resources
Mariana Resources Ltd is an AIM (MARL) and TSXV (MRA) quoted exploration
and development company with an extensive portfolio of gold, silver and
copper projects in South America and Turkey.
Mariana's most advanced asset is the Hot Maden gold-copper project in
north east Turkey, which is a joint venture with its Turkish JV partner
Lidya (30% Mariana and 70% Lidya) and rapidly advancing to development.
An updated mineral resource estimate (detailed table below) of 3.43 Moz
gold Equivalent (Indicated Category) and 0.09 Moz gold Equivalent
(Inferred Category) (100% basis) in the main resource zone as well as a
maiden 351,000 Moz gold Equivalent (Inferred Category) (100% basis) in
the new southern discovery zone was reported for Hot Maden on July 25,
2015. Elsewhere in Turkey, Mariana holds a 100% interest in the Ergama
gold-copper project.
In southern Argentina, the Company's core gold-silver projects are Las
Calandrias (100%), Sierra Blanca (100%), Los Cisnes (100%), Bozal
(100%). These projects are part of a 160,000+ Ha land package in the
Deseado Massif epithermal gold-silver district in mining-friendly Santa
Cruz Province.
In Suriname, Mariana has a direct holding of 10.2% of the Nassau Gold
project. The Nassau Gold Project is a 28,000 Ha exploration concession
located approximately 125 km south east of the capital Paramaribo and
immediately adjacent to Newmont Mining's 4.2Moz gold Merian project.
In Peru and Chile, Mariana is focusing on acquiring new opportunities
which complement its current portfolio.
Safe Harbour
This press release contains certain statements which may be deemed to be
forward-looking statements. These forward-looking statements are made
as at the date of this press release and include, without limitation,
statements regarding discussions of future plans, the realization, cost,
timing and extent of mineral resource estimates, estimated future
exploration expenditures, costs and timing of the development of new
deposits, success of exploration activities, permitting time lines, and
requirements for additional capital. The words "plans", "expects",
"budget", "scheduled", "estimate", "forecasts", "intend", "anticipate",
"believe", "may", "will", or similar expressions or variations of such
words are intended to identify forward-looking statements.
Forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause actual
results to vary materially from those expressed or implied by such
forward-looking statements, including, but not limited to: the effects
of general economic conditions; the price of gold, silver and copper;
misjudgements in the course of preparing forward-looking statements;
risks associated with international operations; the need for additional
financing; risks inherent in exploration results; conclusions of
economic evaluations; changes in project parameters; currency and
commodity price fluctuations; title matters; environmental liability
claims; unanticipated operational risks; accidents, labour disputes and
other risks of the mining industry; delays in obtaining governmental
approvals or in the completion of development or construction
activities; political risk; and other risks and uncertainties described
in the Company's annual financial statements for the most recently
completed financial year which is available on the Company's website at
www.marianaresources.com . Although we believe that the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions and have attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be
no assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated
in such forward-looking statements. Accordingly, readers are cautioned
not to place undue reliance on forward-looking statements. We do not
undertake to update any forward-looking statements, except in accordance
with applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
PEA Announcement Hot Maden:
http://hugin.info/137803/R/2071691/778535.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Mariana Resources Ltd via Globenewswire
http://www.marianaresources.com/index.php
(END) Dow Jones Newswires
January 17, 2017 06:35 ET (11:35 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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