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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Mariana Res | MARL | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 0.00 | 0.00% | 99.00 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 99.00 | 99.00 |
| Top Posts |
|---|
Posted at 04/5/2017 21:11 by mirabeau Thanks to John Cornford at MI for this excellent article:-Does Mariana’s merger with Sandstorm Gold stack up? John Cornford 04 May 2017 Among the four main ways to make money from mining gold or silver – exploration, development, streaming or financing a mine – it is streaming (or royalties) that can often be by far the most profitable. I showed in my earlier streaming coverage how streamers tended to make much more profit from a mine than did any other participant. But from the would-be producer’s point of view, they are a much more expensive way to finance a mine than any loan or any third-party equity investment. And the streamer usually leaves the poor old owner to take the operating risk. So what are we to make of it when a gold explorer seeks to turn itself into a streamer? As in the case of Mariana Resources (LON:MARL) who just last week agreed (subject to shareholder approval) a ‘combination&r MARL chart Mariana Resources I have avoided mentioning so far, despite that its gold prospect at Hot Maden in North East Turkey is developing into a far richer grade, albeit smaller, potential copper/gold mine than is Solomon Gold’s at Alpala in Ecuador. That was because, even though holding shares myself, Mariana Resources only has a 30% share of Hot Maden, against local Turkish company Lidya who is managing the exploration. So MARL could never control how the prospect is developed, while its shareholders could never be sure how their interest might eventually benefit them. And so it was turning out, with MARL’s £76m market value (at 59.5p) lagging well behind its 30% share (about £330m) of the $1.4bn NPV8 that a January PEA, conducted only 20 months after Hot Maden was first discovered, came up with for its initial more than 4Moz resource. This also exhibited a staggeringly profitable internal return of 153% p.a., against an initial capital cost of only $169m. Given that subsequent high grade drilling results have not been included in the PEA, that estimate is likely to prove rather conservative. (Note that, while most of my coverage has explained why NPVs usually greatly exaggerate the true value of an owner’s stake in a mining project, in a case like Hot Maden’s extremely high IRR, where the initial capex is low compared with the NPV, the true value to the owner can more nearly equate to the latter because financing will be so low as not to require equity dilution or too much borrowing.) Against Mariana’s 59.5p share price, Sandstorm has come up with 28.75p in cash, plus just under one of its shares (listed on TSX and NYSE) for every four Mariana shares – worth 110p at $1.28/£. But on the announcement Mariana’s shares only rose to 92p, while Sandstorm’s fell by 10%. So although Sandstorm thrives on its streaming – and this deal, due to Hot Maden’s rock-solid prospects, ought to be more profitable and even less risky than most – it obviously hasn’t attracted universal joy. SSL chart That is because not only is the deal not yet done, but also that its merits are considerably more difficult than most to evaluate. Certainly I myself can’t quite get my head around the difference between the profit shareholders could expect if staying with Hot Maden (as a minority holder) as part of an independent Mariana Resources (not to mention its other exploration prospects) and that to be expected if they share in the usual super-profitable streaming deal that Sandstorm says it hopes to sign with Lidya to help get Hot Maden into production (not to mention the other 155 streaming deals that Sandstorm now has and due to expand usefully in the next three years). In fact Sandstorm has actually said that it only ‘hopes’ to convert what, with its existing holding, will be 37% of Hot Maden into a streaming deal. But it doesn’t look that simple. Hot Maden’s high profitability will stem from the exceptional 11% grade for its gold and the equally exceptional 1.9% for its copper, which means that its mining and production cost is expected to be well under $400/gold oz. That means that as a stand-alone company it probably won’t need the likes of Sandstorm to supply its capital. Sandstorm mainly comes to the aid of miners who can’t fund their developments, in return for which they pay an immense premium (as my initial article on streamers showed) in the form of foregone revenues from their gold, which works out well above what a bank, or equity investor, would expect. In its latest year for instance, Sandstorm made a staggering $1,000 per oz profit by reselling what its streaming clients diverted to it – in a year when gold’s realised price averaged below $1,250/oz, showing just how low a price Sandstorm is paying for its gold streams. So therein lies the rub! On Hot Maden’s exceptional profitability Lidya won’t need any such streaming deal. Sandstorm hasn’t as yet said that it has agreed any such deal – merely that it will negotiate once Hot Maden has passed various development milestones. As a result of this uncertainty there appears to be plenty of opposition to the deal, not least from gold guru Sprott who is bullish on gold’s prospects and has a 4.5% Sandstorm stake. Sprott’s vote, alongside other naysayers, will be set against the 17% or so of its own and its shareholders that Sandstorm has secured to vote for the deal. Bearing in mind the difficulty (without a lot of effort which, no doubt, brokers better paid than me will be feverishly going about right now) of working out the pros and cons for Mariana shareholders, it seems likely those major investors in favour are merely wanting to take their money now and run, rather than wait to see how the deal pans out in the unpredictable medium term. Other reasons for Mariana shareholders to vote yes would be removal of the uncertainty stemming from their lack of a control of Hot Maden, as well from uncertainty about Turkey’s politics. Sandstorm would also give them a 19% share of the 30% increase in the highly profitable streaming revenues it expects over the next three years – although whether that would be earlier than the profits they might expect when Hot Maden goes into production is yet to be seen. Against that, Mariana holders tempted to stay with the shares (instead of taking their money and running) but to vote against the deal would be supported by the conspiracy theorists who are atwitter suggesting that Mariana only agreed to proposing the deal in order to flush out another buyer. They would also point to a recent hiatus in Sandstorm’s earnings which caused weakness in its shares even before the Mariana announcement. And the attempted deal will certainly raise Mariana’s profile (although already listed on the US over-the-counter market) among American investors. But other tweeters wonder why the parties want the deal structured as a merger (needing 75% shareholder agreement by each company) rather than as a straight take-over requiring only 50% of Mariana’s holders. That will only become clearer later when the date for a vote is announced. So although the respective shares have behaved rather calmly since the initial adjustment (smoothed perhaps by automatic arbitraging between the various markets), I wouldn’t be surprised to see rather more volatility developing in the run up to the vote. Meanwhile, I have taken my profit on Mariana but would buy back depending on the extent of any fall if the vote is a ‘no’. - |
Posted at 04/5/2017 13:47 by goldenshare888 Yes, Sandstorm looks set to open lower again today, thus reducing the value of the offer for MARL holders.Many ways for the big boys to make money from this and not necessarily to the benefit of MARL holders. Pleased to be out of it at the top and IF I want Sandstorm shares, which I don't, I could buy them cheaper on market (every day currently) by selling MARL @ c95p. As GOLD falls further ($1229 now) the value of this offer will decline further, hence the SHORT interest. |
Posted at 04/5/2017 10:42 by stompy jones Honest answer.First point is an astronomical take out price was probably unrealistic from the start: figures like £2.50 were always pie in the sky. There's a Sprott video from a couple of years ago and the charts of taken out explorers show that the take out price is not much higher than the share price highs. The reality seems to be that multiples from that high point don't seem to happen and the bulletin boards are always left with posters complaining that they've been robbed. Second point is at first the deal seemed over-complicated. But - after a little while and not thinking about it all the time - there is a elegant logic to it. It's a creative solution to an impasse and much simpler than some posters seem to think it is. The trick is not to think about it and talk about it all the time. Let go of being a MARL shareholder and start to look at it from a different angle. Be like Glen: change hats. Third point is it's all about getting a cash flow for Hot Maden with SAND as the pipe. It's like taking HM to production and getting a royalty for it. For the MARL shareholder there might be a higher bid from left field but in the meantime it's about getting a position in SAND at a bargain price. I'm holding MARL for getting SAND shares at a knock down price and buying SAND on the market for 243p GBP if it gets so low. That's the way I see it. |
Posted at 02/5/2017 13:39 by jimbowen30 BitAs previously stated, I've been a shareholder in SSL for a few years and I think the business model and company is first class, but it's no Franco Nevada in terms of size. Your post above is 100% spot on imo. It's certainly a change in approach for SSL and this has definitely spooked/upset some shareholders, hence the fall. That said I do rate Nolan Watson and have spoken to him at length personally at conferences in London. He is young and hungry to build a successful company. The fact they are doing this deal indicates the huge potential of Hot Maden. Without Sandstorm, I don't beleive MARL will see the maximum benefit, so the deal makes sense to me - from both sides. The downside, is that the project is in Turkey but this won't change whether MARL merges with SSL or is a stand along company. My view is that the risk is far less if MARL is part of SSL. So in the short term, I see volatility (hence the share price fall) but longer term I think this could be a company transforming deal that we all benefit from. |
Posted at 02/5/2017 11:25 by bittorrent As a poster on the SSL thread pointed out, this deal represents a sudden lurch in direction for Sandstorm, which was not signalled beforehand. Giving up a fifth of the company for one asset in a region not considered ultra safe has clearly disappointed some Sandstorm shareholders.So what are the possible options? 1. The deal goes through, Marl holders get their SAND shares and a bit of cash, maybe SAND shares start to recover, depending on whether SAND can get a royalty deal with Lidya or a third party. 2. The deal falls through, MARL shares fall back to pre announcement levels. 3. A counter bid emerges at a higher offer, possibly with more cash on offer, Marl shares jump up. |
Posted at 02/5/2017 09:38 by stompy jones There is another way of looking at this: don't look at a MARL cash back. Instead, look at the discounted SAND shares in the deal.In a way, it's as if MARL were taking HM to production and getting the cash flow. But MARL needs SAND to do it. There could be a case for buying MARL maybe for the chance of a higher bid but mainly to get SAND shares at a bargain price. Be like Glen: put a SAND hat on and see it from that angle. Comments welcome. |
Posted at 27/4/2017 10:52 by stompy jones Last comment to throw into the discussion:It is starting to look to me that SSL may have thrown good money after bad to protect their original unusually large stake. If you read an interview with Nolan Watson from about 3 or 4 years ago he says that 13 or 14% should be the maximum input for a streaming/royalty company and usually it's best to commit less. The 7% holding in MARL shares was already something unusual and this latest is much higher and riskier. It could be that this deal is the best thing for ordinary MARL holders and a chance to jump ship at something like previous highs. MARL wasn't going anywhere: sentiment was against it and all the warrants didn't help. Maybe the problem was Turkey but if MARL was at risk from bullying Turks then I don't see that SSL is in a much stronger position. As I said earlier, good luck to all. SJ |
Posted at 26/4/2017 17:04 by shavian Just listened to Nolan Watson and Greg Parsons on the Sandstorm / Mariana joint webcast on the SSL website. Very matter-of-fact low BS presentation. Nolan does not do BS in my experience. You may be able to listen again at:If not I'm sure it'll be posted on both websites shortly. My pull on all this is that it is a very practical solution to the emerging problem that MARL is currently a very junior partner in HM with shallow pockets and a very thin deck of cards if the Turks decided to play hardball (as with Bahar/Stratex). The new joint strategy of eventually converting the jv into a gold stream, thus getting rid of the annoying junior partnership, might well suit Lidya better as they would then own 100% of the equity. This would protect our future interest in HM better imo, even if it looks like a short term dashing of our loftier expectations. Being holders in SSL will broaden our expectations and greatly reduce all sorts of risks, especially political risk. HM coming on stream is expected to double SSL's annual royalty and stream volume from 61k oz in 2019 to 135k oz by 2022. Remember that will be raw income with no OPEX to pay for, so most of it can be trousered. After carrying many scars of investing in junior miners over the years, I had twigged the benefits of investing in streaming and royalty companies a few years back with a holding in APF, although I disliked their weighting in Australian coal. When SSL first took its stake in MARL I researched the company and its people and very much liked their No-BS press-on attitude. Gradually over the past year I have slimmed down my more hopeless junior goldies on any price spikes which came along, and recycled the pathetic proceeds into SSL. Natually I was delighted by the news this morning, but I can well see why some of you will be disappointed by the loss of all those blue sky dreams of HM, the Russian Zone etc. I think you'll do better in the long run sticking with SSL if you can hold the shares. If not - change your platform! My existing SSL shares are registered on the TSX, and I'm unclear whether the new exchanged shares will be registered on TSX or NYSE. They are still the same shares but I have no clue how to consolidate them onto TSX shares on my platform. Time will tell, but anyone help me here? I note that SSL and MARL shares are moving in opposite lockstep as the arbs do their thing. I don't think we need to get too excited about this - wait for the paperwork. Finally I agree with those above that there is little or no chance of a rival bid. Who would want to be the junior partner to a Turkish conglomerate you don't know - in the new Turkey of today? Good luck all holders. |
Posted at 13/3/2017 12:44 by chipperfrd HM project initial CAPEX requirement = US$169.2mSo MARL's 30% attributable share is currently US$50.76m. However, by the time the PFS is released there may well have been changes to planned throughput, etc, etc, which could alter the likely project development cost. But US$50m looks a reasonable starting point for MARL if they are to carry their interest forward into production. That sum could well be raised by both debt and equity. Only time will tell which way this all works out for MARL. First production looks possible in 2019 although probably better to think in terms of 2020/2021 for commercial sales. From my viewpoint, the HM project values MARL considerably higher than current, even allowing for CAPEX raising in c. 2018/19. So current share price weakness appears (to me) to be an opportunity to add. But like everything else, only time will tell! Chip |
Posted at 17/1/2017 15:11 by paleje IC covered these on 17 November when the share price was 69p, their conclusion I've pasted below, they confirmed what we all know AISC will be very low although no number stated and unrisked value at US$10/share. They thought it a likely t/o target:-Mariana's main asset is its 30 per cent stake in a gold-copper project in eastern Turkey, known as Hot Maden. While the project is still at the pre-development stage, and there will not be a pre-feasibility study until next year, drilling to date has revealed very high ore grades. A month ago, the company recorded its most successful strikes to date, discovering a 69.6m interval of 62.7g of gold per tonne and 2.68 per cent copper. That bonanza is unlikely to be a one-off, as previous holes have revealed grades in excess of 20g across thick intercepts, and an average of 15g. That is simply streaks ahead of Acacia's entire exploration drilling pipeline in Kenya, or Randgold's average mined grades, which sat between 1.4g and 4.8g per tonne last year. The successful drilling programme has already led Mariana and the project's joint operator, Lidya Madencilik, to establish a known indicated resource of 3.43m ounces of gold equivalent, although this is likely to significantly expand following last month's jackpot result. So high are the grades discovered so far that all-in sustaining costs of mining are likely to be very low. What is lacking is development financing to get Hot Maden to the mining stage. But the company says the £6m raised last year should see it comfortably into 2017. By that point, Lidya and Mariana will have a much better idea of how to move Hot Maden into production, and which gold majors may be interested in taking a stake. MARIANA RESOURCES (MARL) ORD PRICE: 69p MARKET VALUE: £84.2m TOUCH: 68-70p 12-MONTH HIGH: 84p LOW: 12p FORWARD DIVIDEND YIELD: NIL FORWARD PE RATIO: NA NET ASSET VALUE: 10.6p NET CASH: £5.8m Year to 31 Dec Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p) 2013 0.0 -1.1 -0.4 nil 2014 0.1 -1.5 -0.4 nil 2015 0.0 -2.0 -0.3 nil 2016* 0.0 -2.2 -1.8 nil 2017* 0.0 -2.3 -1.9 nil % change - - - - Normal market size: 10,000 Market makers: 6 Beta: 0.60 *Northland Capital forecasts IC VIEW Mariana's thin balance sheet and counterparty risk make it a highly speculative play. But the company has catalysts in front of it, and its share of Hot Maden represents an un-risked resource base of over $10 a share at the current gold price. That leaves plenty of room for upside even with dilutive project financing. But we think there is also a good chance a larger miner could swoop before then. Buy. |
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