Mariana Resources Ltd (LON:MARL) 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.
Read the full Mariana Resources Ltd report here: MARL151102_Northland Capital Partners_Mariana Resources
