Mariana Resources Ltd (LON:MARL) Chief Executive Officer Glen Parsons caught up with DirectorsTalk for an exclusive interview to discuss the completion of a £177 million equity raising and how this will be used, resource-based investments and plans for the coming months
Q1: Congratulations on completing this successful capital raise, what position does this put Mariana in now?
A1: Obviously having raised capital, it always puts a company in a stronger position and the good thing is that we raised a reasonable amount of cash, around £1.77 million. The key thing here is it positions Mariana for 2016 with the specific asset being Hot Maden. Hot Maden has delivered from discovery in February to resource in August; 3 million ounces gold equivalent, and we’ve started drilling again now, they’ve been holes outside of the resource which have been coming in and now with the permits on the new ground to the south has been approved, obviously we’re going to be attacking the south. Lidya, our partner, is moving rapidly to PEA and effectively to production, at the end of the day that’s what they want to do. We’ve got quite an aggressive programme going forward so they key thing for us in terms of this is actually positioning ourselves to make sure that our pro-rata interest, our 30%, that we can actually fund that and that’s the main thing here.
Q2: You’ve mentioned resource-based institutions now investing in Mariana, why do you see this as a good thing?
A2: If I take a step back and say how Mariana was funded before, over the last 2 years we have been a retail stock, really playing time to develop our assets and trying to get the excitement and we’ve had this portfolio effect and that’s delivered, we think some reasonable success rates through the past. With Hot Madden, with our portfolio theory or strategy, we’ve managed to have this successful that we’ve had with Hot Maden and now what’s happening going forward is with Hot Madden moving so fast, with 3 million ounces going to production, essentially you get to the next stage of funding. Development funding is certainly not traditionally done by the retail sector and you start to get your guys to understand the whole development cycle coming into production and ultimately production and then that’s where your resource-based funds come in, this is their space, this is what they’re looking for. So the key thing is that obviously the asset has delivered and that’s what some of these institutions are wanting to see. I think we’ve turned the tide in February this year with our first raise, £1.8 million, Sprott came in and that’s a resource-based fund there, they understand this space and understand the value in the asset. With the continued growth in Hot Maden over the year and the resource, there’s no doubt we’ve had global interest in the asset so we had RCF and their resource capital funds coming in this placement as well as another 2 institutions, they arent significant institutions but they are resource-based institutions nevertheless and they’ve come in as well underpinning the whole race. Therefore what we’ve got now is the understanding, the right supporters to take the development of Hot Maden forward in one form or another. So that’s why that is a good thing for Mariana because it’s a good thing for Hot Maden, they support and they’re not going to want to see this fail as well. The asset is delivering and it’s got to keep on delivering, it’s got to be able to be funded to deliver so therefore you’re needing the bigger players in there. That’s a positive thing for everybody, for our retail investors, for our supporters/investors going forward, that’s actually a great thing. We see it and we see it’s going to be beneficial to the company.
Q3: What will the funds be used for and what further development of your assets can expect to see over the next few months?
A3: As I mentioned, a large portion of the funds will certainly be allocated to Hot Maden, that’s the intention. Just coming to that, we’ve got the last payment of the earning to the 70% by Lidya, that’s the £350,000 that’s effectively been paid and it is funding our portion going for the rest of the year so it’s within the budget of the rest of the year so that’s funding around £1.2 odd million exploration spend on Hot Maden. The guys have recommenced now, we’ve got 2 rigs busy, moving into detailed metallurgical studies which is ultimately going to come to going to the PEA. January, going forward, we get our first cash call, or it’ll be late December, for the quarter and so we’ll see the first quarter, second quarter pretty well accounted for within this raise and we are working at Suriname as well, we did have some commitments on our earning so some fund has certainly been allocated to Suriname. The balance of the portfolio, in Argentina we’re still waiting for elections so that’s sort of on a go-slow at the moment, in Peru we’ve just recently relinquished Soledad but we are sitting on some interesting properties there but those are, at the moment, sort of land-holding, low cost operations, we’ve got elections there next year so we’ll probably be wait and see, we’ll try and actually pick up some more exciting properties and wait for elections and in Chile which we don’t really have to fund because it’s already in a funded Joint Venture and that we’ve started working on already. So overall, that’s where we see the funds going and then obviously working capital as well as potential new opportunities that we do see out there that could complement Mariana Resources Ltd’s strategy.
