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Mariana grows high-grade gold-copper resource in Turkey, talks coup impact

Mariana ResourcesLtd. has boosted confidence in the quality of high-graderesources at its 30%-owned HotMaden project in Turkey and, for the first time, estimated resourceson new gold and zinc zones.

The resource update comes ahead of Mariana's planned listingon the TSX Venture — an announcement is expected before the end of the month — andas work on a preliminary economic assessment of the Hot Maden project continues.

"Obviously these high grade systems … do generate a lotof cash flow," Mariana Resources COO Eric Roth said in a July 25 interview."And I think people will probably be surprised with the kind of numbers"the Hot Maden PEA yields. The project is 70% owned by Lidya Madencilik San. ve Tic. AS, a Turkish company.

Breaking the resource update down, the raw ounce-count barelychanges. Largely, Mariana upgrades inferred resources to the indicated category.Mariana grew indicated resources 84% in terms of contained gold, to 7.1 milliontonnes at 12.2 g/t of gold and 2.3% copper. This included the eye-popping gradesin a high-grade subsection of the resource, where indicated resources doubled to2.1 million tonnes at 32.7 g/t of gold and 3.5% copper.

If the global resource numbers didn't change much, Mariana'ssuccessful conversion of inferred to indicated resources will be taken as a voteof confidence in the project's core driver: the high-grade subsection of resourcesthat has caught the eye of industry observers since Hot Maden was discovered inFebruary 2015.

It has become increasingly clear, Roth said, that the high-gradezone in the steeply dipping deposit is discrete and continuous, which could aidin mine planning. The high-grade zone — grading over 30 g/t of gold — is on theeastern margin of the larger main zone, where gold grades are closer to 4 g/t ofgold in a deposit with a true width of between 50 to 70 meters.

"The contact of the zone is very clear. It's very sharp,"Roth said. "And I think from a mining perspective there's certainly enoughcontinuity based on the horizontal and the vertical for it to be considered as aseparate sub-unit, separate to the main [zone] if you like."

Mariana has traced the main deposit down to 400 meters whereit hits anhydrite that is not mineralized. If there is potential to chase the depositdeeper, beneath the anhydrite, Roth says Mariana remains focused on resource potentialcloser to surface.


For the first time, Mariana outlined resources on a new zoneof gold-copper mineralization 300 meters south of the main deposit. Mariana saidthere were 1.4 million tonnes at 7.2 g/t of gold, for 313,000 ounces of gold, witha copper credit as well. A high-grade zone at 22.2 g/t of Au and 1% copper accountedfor half the contained gold ounces.

Brent Cook, a veteran mining analyst who runs Exploration Insightsand covers Mariana Resources in his Exploration Insights newsletter, said he wasparticularly buoyed by the new southern resource and, perhaps more so, the potentialbeyond.

To Cook, the Hot Maden deposit is by and large a volcanogenicmassive sulfide (VMS) system, and in the south zone he sees hints of a stockworksystem that was the "heat engine" at the center of the deposit. Cook,who has visited the project, is hopeful Mariana can make more discoveries to thesouth, noting strong alteration at surface.

"Alteration there is just blowing the rocks to pieces,"he said in a July 25 interview. In that he wonders if there's as much resource potentialto the south as the north.

"There's a good shot they can replicate it to the south,"Cook, who owns Mariana shares, said. "I like the looks of it."

Roth also raised the prospect that zinc resources could boostmining plans at Hot Maden. A few million tonnes of modest grade zinc resources,located in the hanging wall of the main gold-copper deposit, are a great deal lessimportant to the project than the high-grade gold resources.

But Roth sees potential for the zinc mineralization to boosteconomics. "Obviously the main driver is the gold-copper system and nothingis going to distract us from that," Roth said. "But the flip side is,depending on what the development options look like, if there's a possibility oftaking some of that zinc mineralization en route, why wouldn't we?"

Turkey chaos

Market reaction to the resource estimate was positive with sharesclimbing 13% today, on moderate volume. That helped Mariana's share price regainsome of the ground it lost following the attempted coup in Turkey earlier this month,when a faction of the military attempted to topple the government of Recep TayyipErdogan.

Roth, who said he was in Ankara during the coup attempt, recalledthe recent events.

"It was a little bit chaotic," he said.

In the aftermath of the coup attempt, Erdogan has called a stateof emergency and pushed to consolidate power, purging government and institutionsof opponents and perceived enemies.

Roth described the situation as fluid but noted that so far ithas not had an impact on operations.

"Let's see how things develop here, but from our perspective,from a company perspective, nothing's changed at the project level," he said.

Roth added, echoing global shock over events in Turkey, "Idon't think in 2016 you expect in a country as organized and advanced as Turkeyfor these kinds of things to happen. But I guess they can."