Mariana Res
0.00 (0.0%)
Share Name Share Symbol Market Type Share ISIN Share Description
Mariana Res LSE:MARL London Ordinary Share GG00BD3GC324 ORD 0.1P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 99.00 0.00 00:00:00
Bid Price Offer Price High Price Low Price Open Price
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining -4.58 -4.20 134
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 99.00 GBX

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Posted at 17/6/2017 10:45 by bittorrent
Proton, have you looked at HUM, due to be pouring gold by the end of the year, looks promising:
Trading Performance, Share Price & Value

During the period Hummingbird's share price rose from 12.5p to 18p, and post period end achieved highs of up to 27p. We issued 236,288,781 new shares in return for US$76m.

Based on this capital structure and looking forward to our first year of full scale production, this marks Hummingbird out as the standout gold developer trading in the public markets. It is trading on 1.26 times projected free cash flow for the first full year of production against an industry average which can range anywhere from 15-25 times. In the first full year of production, cash flow per share will be 20p.

This assessment of Hummingbird's exceptional position in the market does not take our 4.2Moz Dugbe gold project in Liberia into account. Broker Cantor Fitzgerald has suggested that this project could offer significant further upside and add a further 14p in value.

It is with this in mind that I firmly believe that Hummingbird is due a re-rating in the market as it evolves into a profitable mining company and delivers the significant free cash flow highlighted in our DFS.

Posted at 09/6/2017 12:10 by greenrichard
I think that any weakening of the MARL price in UK is likely down to private investors deciding to sell in the run up to the meeting because they don't want the perceived complication and/or currency risk involved in holding SAND. MMs know this and happy to take the shares and sell them onto the hedge funds.
Posted at 09/6/2017 08:36 by boadicea
The calculation of the present equivalent value of the offer (~107p yesterday morning but changing with the Sandstorm share price) includes the cash which will automatically be credited to one's account.
One misses three things by selling now -
1 the arbitrage element, (107 - 101.5 = 5.5p in the example above for yesterday)
2 potential complications associated with holding foreign shares (varies with broker)
3 potential performance of the Sandstorm share price after completion.

Posted at 11/5/2017 11:03 by steeplejack
Value of bid currently 97.5p.

Extensive reviews of Tuesday's London presentation on the LSE board.

Suggestion that SSL might get passed 50% acceptance but not 75%.Then I guess,SSL triggers the takeover option.I'm increasingly beginning to think that SSL might squeeze home with 75% .This is a very fragmented shareholders list with a high constituent of private client holders.There's the irritation of assimilating Sandstorm shares,listed on a foreign exchange,that will encourage many simply to sell in the market and that stock will be accumulated and assented.I'm an inclined seller,the possibility of a counter offer appears to be receding but I see no hurry to sell.Logically,the current discount to the value of the bid should narrow,the nearer we get to the merger being consummated and perhaps Sandstorm will be able to convince the market of the merger's merits pushing up the value of the merger and the Marl price.

Posted at 04/5/2017 20:11 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’ with Sandstorm Gold (TSX:SSL).

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 09:42 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 12:39 by jimbowen30
As 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 08:38 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 01/5/2017 10:15 by steeplejack
The bid looks too low and with that in mind,the 75% share acceptance is a tough call.The oddity is that the Sandstorm price has fallen by over 15% on the announcement of the bid.Strange if it is generally accepted that the bid represents such an excellent "cheap" deal for Sandstorm.If this is such a steal for Sandstorm,the share price should rise and the value of the bid to Mariana shareholders increase.That'd encourage widespread acceptance and Mariana would be taken over.Perhaps Sandstorm brokers are shorting Sandstorm to drive down and acquire cheap Mariana stock but it this puts off acceptance from the likes of holders here,then the exercise is self defeating.

Even if Sandstorm were to raise their bid would it now surpass the original 110p bid value calculation and if it did,how long would that new valuation be sustained, bearing in mind that Sandstorm shares could weaken.I'm not sure Sandstorm are awash with monies to increase the cash element of the bid.I reckon Sandstorm are going to have to drive up the value of their own stock if they are to get Mariana on current terms.An obvious observation but maybe not easily achieved in which case they could lose the day despite Mariana board approval.I think Mariana management have possibly paid more attention to the attraction of new jobs in the Sandstorm empire than the terms of the bid itself.This is not a done deal as its turning out.

By the by,if Mariana/Sandstorm wanted the deal to go ahead smoothly,it might of been sensible to heed the complications caused by a disappearing AIM listing.The wording of the original RNS seemed only too keen to talk about the liquidity of Sandstorm stock on the US market but it's somewhat disingenuous,most Mariana punters won't be trading Sandstorm stock.All too complicated and anyway,the Inland Revenue will probably regard the acceptance of Sandstorm stock trading on a foreign exchange as a change of asset designation (i.e. capital losses and gains will be calculated on existing Mariana stock) and a holding of Sandstorm equity will be a new ballgame.I'm not sure his this is going to play out but I reckon that this lowball deal has been constructed on the basis that AIM punters can be expected to bank their profit and walk away.The MARL management rather oddly outlined this as one such option.Well,sorry,I'm not going to do that anytime soon.

Posted at 13/3/2017 12:44 by chipperfrd
HM project initial CAPEX requirement = US$169.2m

So 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!

Mariana share price data is direct from the London Stock Exchange
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