Mariana Resources and Cliff Natural Resources to jointly explore for iron oxide-copper-gold deposits

Mariana Resources (AIM: MARL) has signed a letter of intent with US based miner Cliffs Natural Resources Inc  (NYSE:  CLF) to explore for iron-oxide-copper-gold (IOCG) deposits in a 92,000 sq km (square kilometre) area in north-central Chile.

This area includes Mariana’s 4sq km Buenaventura and 46 sq km Perro Chico IOCG projects and the 19 sq km Rodados application located in the prospective IOCG Atacama Fault Zone in northern Chile.

Under the terms of the agreement, Cliffs can acquire a 51% interest in Mariana’s subsidiary Sociedad Contractual Minera Mariana (SCM Mariana), which will be formed for the JV (joint venture), by funding a US$2 million exploration programme and another 19% to take its interest to 70% by spending a further US$1 million. Cliff’s minimum expenditure commitment is US$0.5 million.

The initial exploration focus will be on Mariana’s Buenaventura and Perro Chico projects, where further drilling is planned. Additionally, SCM Mariana will explore for IOCG targets in a 900 km (kilometre)-long zone which extends from Tocopilla to La Serena.

Should Cliffs secure a 70% interest in SCM Mariana, each party will contribute its share of funding requirements. Should one of the partners' interest shrink to below 10%, said interest will be converted into a 2% royalty on net smelter returns on any subsequent production.

Mariana expects the JV pact with Cliffs to “add considerable momentum” to its Chilean IOCG programme, which now encompasses an extensive prospective part of northern Chile on top of the Perro Chico and Buenaventura projects.

“It brings together the Mariana team's Chilean exploration experience and Cliffs' mining and metallurgical expertise and will facilitate an ambitious exploration programme in this prime exploration area,” said Managing Director of Mariana Resources John Sutcliffe.

Expenditures by Mariana on the project since 1 January 2010 will be reimbursed by Cliffs once it completes the due diligence process.

The company is currently expecting the first assay results from drilling at its Las Calandrias project in the Santa Cruz Province of Southern Argentina, from  a total of 495 samples submitted. The first results are due at the end of the current month, with remaining batches to follow in sequence.

Drilling, as part of the 3,500m programme, is ongoing and Mariana is testing the property’s priority targets - Calandria Sur, El Nido and Calandria Norte.

At Calandria Sur, Mariana has completed 14 holes covering a total of 1,560m. So far, the drilling work has encountered broad zones of brecciation, silicification and stockwork marcasite mineralisation ranging from 14m to 80m down-hole.

“The recent bonanza gold and silver assays in follow up channel sampling at the El Nido Norte prospect are very exciting and present new drill targets" Sutcliffe said.

http://www.proactiveinvestors.com.au/companies/news/6482/mariana-resources-and-cliff-natural-resources-to-jointly-explore-for-iron-oxide-copper-gold-deposits-6482.html