Mariana Resources (LON:MARL) Chief Executive Officer Glen Parsons caught up with DirectorsTalk for an exclusive interview to discuss share price movement, the positive results at Hot Maden and portfolio strategy
Q1: We’ve seen the share price rise over recent weeks, is there a particular driver on this, what’s your take on this?
A1: We’ve had those fantastic results out of Turkey and following that our partner, Lidya who is the operator on the project, has come back and said they will be doing follow up drilling. I think it’s obviously in anticipation of the follow up drilling, really those 2 standing holes; holes 4 and 5, really putting a tangible feel to the project and with the grades there as well so I think that’s what’s fundamentally driving Mariana’s share price and investor interest at the moment.
Q2: The share price is obviously rising even with the oil price going up, how much is the oil price actually a factor in your business model?
A2: From a pure fundamental prospective, we really try and gage our value in the project by the value add rather than the pure factor of other variables. Obviously oil price and gold have some correlations but for us it really is a case of trying to bring on projects at an early stage and if you can add value to the project, ultimately value is added to the share price so that’s the way we like to do it.
Q3: In terms of Hot Maden, what’s the situation there?
A3: In February we reported those 2 significant intersections in Hot Maden, 103 metres at 9g of gold and then 82 metres at 20g of gold and those were really discovery holes, we’ve only had 7 holes in that focus area at the moment so from a significance respective you don’t normally get intersections as discovery holes, you might get one or some grade but we’ve got 103m and 82m so it is quite significant. Those 2 holes are 100m apart, we did do a hole to the north which was another 100 metres to the north which actually went into the zinc zone and the first 2 discovery holes, they were actually further to the west into what’s really looking like a copper-gold zone so ideally in hindsight we’d like to turn that hole 6 around and do it the other way but the good thing is we’ve got 10,000 metres that’s going to be happening and that’s on the basis of infill drilling. Effectively what’s going to happen is with the 2 known discovery holes 100m apart and we’re going to be doing effectively 50 metres apart and that’ll slowly build up our confidence in this deposit.
Q4: You do have other resources in your portfolio, how are they going as it seems that some of the focus is on Hot Maden rather than the rest of the portfolio at the moment?
A4: You have to put the whole portfolio into perspective. First of all we aren’t neglecting any of our portfolio, what we might be doing is just positioning the assets so they’re not overshadowed by Hot Maden. We raised, effectively, £1.8 million in February and that was to do drilling in Argentina, in Peru and then obviously try and be able to follow in Hot Maden. We’ve got this drilling that’s commencing pretty soon, it’s going to be commencing in April, we expect it’s imminent, we’re waiting for our partners to let us know when the rig’s on. With that happening and those results coming out of Turkey, anything that we’ll be doing in the rest of our portfolio probably will get overshadowed a little bit but for us it’s actually a case of conserving the cash for when we actually need to possibly be going down for following our Turkey joint venture which is at 30% at the moment, our partner Lidya is still earning in, the 10,000 metres program which is 95 holes we start is probably going to take them to the 70% level and anything thereafter we starting to contribute. So we’re really trying to let Hot Maden over the next 2 months give us a feel of what’s coming out of there because that’ll probably give us a good understanding of what’s going to be required out of Mariana. With that, we’ve re-prioritised some of our other projects and to summarise quickly, Argentina we actually finishing off drilling right now, we’ve drilled down at Los Cisnes on some high grade targets; gold and silver targets there. We moved the rig closer to Las Calandrias and there we’ve done some high grade targets, it was originally going to be 2500 metres, it’s down to 1500 metres so we’ve scaled that back and that’s nearly finished now. In Peru, we were due to do the deeper drilling at Soledad and then moving on to Rurimarac, that’s going to be deeper drilling and it’s probably quite prudent to actually push that out a little bit as I said to let the Turkey result come through and in that way, we actually conserve some cash to actually allow us to decide whatever happens on Turkey, we can manoeuvre quite quickly and not to the detriment of that project. Basically, our whole portfolio which includes Suriname as well is really just about repositioning it and getting it ready following the results of Turkey.
Q5: Looking back at your share price in 2011, it was around 50p plus, we’re now at around 2.5p. Is there anyway of objectively giving your company a valuation? You’re an international player, you’ve got all these projects going on, is there any sort of golden rule that you can come up with in terms of how people should view your company in terms of value?
A5: An exploration company is always difficult to value, there’s no doubt without anything tangible coming out, not saying tangible like a JORC resource. At the time of 50p, Argentina was a jurisdiction in demand and we had some high grade hits and those high grade hits didn’t follow through but we still managed to put a nice resource in. Other projects yes we’ve had successes. Soledad was a success last year with the first set of drilling, now we’re looking for the intrusive down below. From an exploration perspective, we think we have a lot of good projects and we have a lot of projects that are delivering. The key in this market is obviously grade and tangible finds and that’s the thing about Turkey. The Hot Maden prospect effectively with this 10,000 metres, we’ve got the first 2 holes 100m apart so you’ve already got a block of minable ore, this block is 75m wide plus minus 200m deep plus minus 100m of known for the moment so that’s the block we’re talking about. With the 10,000m, probably within 2 months; and that 10,000m will probably take us 2 months to drill, that’ll probably be able to find a resource and we think we’ll have some form of resource coming out of there. That will then give a real tangible value to the Turkey asset and then obviously you’ve still got the upside of our portfolio and the good thing for Mariana’s perspective is that we’re not relying on one asset to deliver value, we actually have adopted this portfolio of strategic assets in the precious metal space; gold, silver and copper, we think that that mitigates some risk for shareholders not relying on one asset to deliver, we can actually give them multiple hits. If one asset does shine as we see now with Turkey, we’ve got the ability to let it shine and show us what it’s got.
