Mariana Resources' acquisition of El Aguila gold project shows good potential, says Fox-Davies
Fox-Davies Capital said the El Aguila property acquired by Mariana Resources' (LON:MARL, TSE:MRY) complements its position in the Desseado massif of Argentina and shows good potential.
Mariana yesterday announced it signed an option agreement to acquire the El Aguila gold-silver property adjacent to its Picadero project from Argentinean private company Winki SA.
The combined Aguila-Picadero project finds itself just 60 kilometres south of Mariana's Las Calandrias project and 50 kilometres west of Extorre Gold Mines (TSE:XG, OTC:EXGMF) Cerro Moro gold-silver discoveries.
Under the terms of the deal, Mariana can acquire a 100 percent interest in El Aguila with Winki retaining a 1.5 per cent net smelter royalty.
The option period is five years with an initial payment of US$60,000 followed by a US$150,000 payment a year later. Thereafter, payments are six monthly for a total of US$3.14 million over the five years.
Mariana can exercise the option within the first two years for US$2.4 million or for US$2 million in the following two years and spend a minimum US$1 million on exploration over the first two years.
In today's note, Fox-Davies said the potential of El Aguila is good given its location between Las Calandrias and Cerro Morro as well as the historical results, which show potential for high-grade gold-silver mineralisation.
Intersections returned by exploration previously conducted at El Aguila included 40/.5 grammes per tonne (g/t) gold and 107 g/t silver across 0.6 metres and a wider interval of 22 metres grading 0.94 g/t gold and 29 g/t silver.
Fox-Davies expects Mariana to progress its exploration programme at the project quickly to rapidly assess the potential and minimise the amount it will have to pay to Winki.
In the meantime, Fox-Davies reiterated its ‘buy' recommendation on Mariana with a target price of 22 pence, more than double yesterday's closing price of 9.88 pence per share.
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