Mariana Resources Limited
Incorporated in Guernsey Reg. No. 44276
Half-yearly Report, Period Ended 30 June 2009
Chairman's Review
Dear Shareholder,
Exploration efforts in the first six months continued to generate
targets in Argentina and Chile in readiness for drill campaigns in
the second half of 2009.
Sierra Blanca, Argentina - 70%
At the 70% owned Sierra Blanca Silver-Gold project which is part of
the Santa Cruz Joint Venture with IAMGOLD Corporation, Mariana
completed a detailed review of the 2008 drilling including an on-site
evaluation by consultant epithermal gold specialist Dr. R Sillitoe.
The project is in the Deseado Massif, an emerging world-class
epithermal gold/silver district. The review highlighted potential
for high grade silver-gold shoots at Veta Chala, requiring more
intensive drilling, and deeper targets at Lucila and an untested
covered area between the two. A trial IP/resistivity survey at sites
along the Veta Chala trend showed the method could be applied to
guide target selection along the trend. With the 2009/2010 field
season underway, discussions are in progress with partner IAMGOLD
regarding the best way to advance the project.
Santa Cruz Area, Argentina - 100%
Last year,Mariana acquired a number of 100% owned property
applications (>160,000 ha) in selected areas of the Deseado Massif,
covering eight groups of properties. First pass prospecting of most
of these areas has been completed with encouraging rock chips assays
from Dos Calandrias (formerly Tongoril), La Auroa, Picadero, El Bozal
and Caballo Blanco. In excess of 30km of vein trends prospective for
epithermal gold/silver have been identified so far. Dos Calandrias
is the first prospect of Mariana's wholly owned land package advanced
to the drilling stage.
Dos Calandrias, Argentina - 100%
The property features a rhyolite dome complex with dome margin
breccias. Veins related to NW and NE structures assaying up to 21.7
g/t Au and 62 g/t Ag were discovered last year. Earlier this year,
consultant Dr. Richard Sillitoe had assigned Tongoril as a "high
exploration priority". More recent follow up trench sampling this
field season located several zones of strongly anomalous gold in
veins and breccias with up to 17.5m @ 1.9 g/t Au and 56.3 g/t Ag.
Diamond drilling commenced in mid September to test six vein/vein
breccias targets at Calandria Norte and Calandria Sur. The first
batch of assay results is expected in the first half of October. The
drilling intersected several veins and broad breccia zones.
La Borita, Argentina - option to acquire 100%
Mariana is seeking a joint venture partner for La Borita copper
prospect on the Alumbrera porphyry copper trend in Catamarca
province. Based on surface copper-bearing travertine, IP and ground
magnetics, it is considered to be a concealed porphyry copper target.
Buenaventura, Chile - can earn up to 80%
Mariana has two IOCG projects with eight targets ready for drill
testing in October/November 2009 at Buenaventura and Perro Chico (see
below). Both are along the prolific Northern Chile IOCG belt.
In 2008, Mariana and Minotaur Exploration Ltd reached a joint
agreement with Buenaventura owners whereby they could jointly earn
51% by spending US$3M over three years and 80% by completing a
bankable feasibility study. Previous drilling had intersected
several zones of IOCG mineralisation, including 6 holes ranging from
22 to 90m @ 0.40 to 0.49 % Cu with up to 0.13 g/t Au. The
Mariana/Minotaur approach was to expand and infill a 2004 gravity
survey looking for concealed dense bodies of iron oxides. This was
successful with a priority anomaly outlined and interpreted to be a
significant dense body at depth (possibly iron sulphides) coincident
with the Cerro Brecha copper prospect (past drill intercepts of up to
28m @ 0.43% Cu, 0.13 g/t Au). Minotaur had to withdraw from the
joint venture prematurely in the first quarter of 2009 for budget
reasons, before a planned deep hole could be drilled. A subsequent
review by Mariana of the three dimensional gravity modeling has
confirmed the drill target which will now be tested by a deep
pre-collared drill hole. Other IOCG targets at Cerro Berta Norte,
Cerro Berta Sur and Longotoma will also be drilled.
Perro Chico, Chile - option to acquire 100%
At Perro Chico (67 km SSW of Copiap�) several styles of IOCG type
mineralization are recognized in the form of mantos, veins,
stockworks and breccia zones. Mariana completed geological mapping
and a gravity survey, with infill gravity of 5 anomalies. Recent
interpretation indicates dense bodies at drillable depths at three
anomalies, which may represent iron oxide zones under gravel cover.
These will be tested by four RC percussion/diamond drill holes and
two RC percussion holes will test the Belleza copper-gold bearing
manto as part of the October/November programme.
Charango, Chile - 1% NSR
Mariana surrendered its right to earn an interest in the Charango
silver prospect owned by Anglo American Norte in favour of a new
joint venture between Hochschild Mining Plc and Anglo American,
whereby Hochschild can earn an interest with Mariana retaining a 1%
royalty on net smelter returns. Charango is located in the El
Salvador Region of Northern Chile. RC percussion drilling of vein
silver targets by Mariana in 2006 did not result in any significant
intercepts.
Ecuador
As stated in the 2008 Annual Report, the legislative and policy
changes in Ecuador made exploration in the country unattractive to
Mariana and the Company withdrew from activity there. The Quito
office was closed down, tenements relinquished and carrying values of
all of the group's assets in Ecuador have been written off
accordingly. This move allows Mariana to fully focus in Chile and
Argentina.
Financial
In order to fund planned drilling, Mariana announced on 13 May 2009
the placement of 36,687,367 shares to institutional investors and
others at a price of 3 pence per share to raise £1.05 million after
issue expenses. As a result, the capital of the company increased to
104,494,235 ordinary shares. In addititon, Mariana has an
arrangement with shareholder Hochschild Mining, whereby Mariana can
place by 12 November 2009 a second tranche of shares to raise
US$750,000,
On 30 June 2009 Mariana restructured some employee and director
options by cancelling 1,860,000 options exercisable at various prices
and issuing in their place 930,000 exercisable at 6 pence per share.
In addition 1,465,000 new options were issued to employees and
directors.
The Mariana group made a consolidated loss of £390,016 for the
half-year (2008: £970,003). At 30 June 2009 Mariana had cash and
cash equivalents of £1,039,346.
On behalf of the Board,
J. R. Horsburgh
Chairman
Date: 30 September 2009
Mariana Resources Limited and its controlled entities.
Condensed Income Statement for the half-year ended 30 June 2009
Half-year Half-year Full year
30 June 30 June 31 December
2009 2008 2008
Unaudited Unaudited Audited
£ £ £
Employee benefits expense (98,270) (318,503) (550,484)
Depreciation expense (7,118) (4,139) (15,605)
Professional services expense (107,839) (63,495) (199,126)
Impairment of deferred exploration - (478,111) (1,332,971)
costs
Exchange gains/(losses) (31,666) (21,036) 143,909
Other expenses (145,890) (121,161) (265,310)
Total expenses (390,783) (1,006,445) (2,219,587)
Interest receivable 767 36,442 56,527
Loss before tax (390,016) (970,003) (2,163,060)
Taxation on loss on ordinary - - -
activities
Loss for the financial period (390,016) (970,003) (2,163,060)
Pence Pence Pence
Loss per share - basic and diluted (0.5) (2.1) (4.2)
Mariana Resources Limited and its controlled entities.
Condensed Balance Sheet at 30 June 2009
30 June 30 June 31 December
2009 2008 2008
Unaudited Unaudited Audited
£ £ £
NON-CURRENT ASSETS
Deferred exploration costs 2,108,155 1,663,824 2,066,922
Property, plant and 90,247 96,550 101,138
equipment
2,198,402 1,760,374 2,168,060
CURRENT ASSETS
Other receivables and 297,017 151,555 294,494
pre-payments
Cash and cash equivalents 1,039,346 1,392,844 747,998
Total current assets 1,336,363 1,544,399 1,042,492
CURRENT LIABILITIES
Trade and other payables 53,465 76,465 94,596
Provisions 33,212 - 34,433
Total current liabilities 86,677 76,465 129,029
NET CURRENT ASSETS 1,249,686 1,467,934 913,463
NET ASSETS 3,448,088 3,228,308 3,081,523
EQUITY
Issued share capital 10,449 5,455 6,781
Share premium account 7,453,055 5,809,203 6,404,488
Other reserves 443,568 289,568 739,223
Accumulated losses (4,458,985) (2,875,918) (4,068,969)
TOTAL EQUITY 3,448,088 3,228,308 3,081,523
Mariana Resources Limited and its controlled entities.
Condensed Statement of Changes in Equity for the half-year ended 30
June 2009
+---------------------------------------------------------------------------------+
| | | Share | Foreign | | |
| | Share | based | currency | | |
| |capital and|payments|translation|Accumulated| |
| | premium |reserve | reserve | losses | Total |
| | £ | £ | £ | £ | £ |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Balance at 31 December |4,940,371 |71,600 |20,682 |(1,905,909)|3,126,744 |
|2007 | | | | | |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Issue of share capital |874,287 | | | |874,287 |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Share based payments | |214,726 | | |214,726 |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Foreign Exchange losses | | |(17,430) | |(17,430) |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Net loss for the period | | | |(970,009) |(970,009) |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Balance at 30 June 2008 |5,814,658 |286,326 |3,252 |(2,875,918)|3,228,318 |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Issue of share capital |596,611 | | | |596,611 |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Share based payments | |47,891 | | |47,891 |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Foreign Exchange | | |401,754 | |401,754 |
|gains/(losses) | | | | | |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Net loss for the period | | | |(1,193,051)|(1,193,051)|
|------------------------+-----------+--------+-----------+-----------+-----------|
|Balance at 31 December |6,411,269 |334,217 |405,006 |(4,068,969)|3,081,523 |
|2008 | | | | | |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Issue of share capital |1,052,236 | | | |1,052,236 |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Foreign Exchange | | | | | |
|gains/losses | | |(325,142) | |(325,142) |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Share based payments | |29,487 | | |29,487 |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Net loss for the period | | | |(390,016) |(390,016) |
|------------------------+-----------+--------+-----------+-----------+-----------|
|Balance at 30 June 2009 |7,463,505 |363,704 |79,864 |(4,458,985)|3,448,088 |
+---------------------------------------------------------------------------------+
Mariana Resources Limited and its controlled entities.
Condensed Statement of Cash Flows for the half-year ended 30 June
2009
Half-year Half-year Full year
30 June 30 June 31 December
2009 2008 2008
Unaudited Unaudited Audited
£ £ £
Cash flow from operating activities
Payments to suppliers & employees (435,658) 376,737 (727,623)
Interest received 767 36,442 56,527
Net cash used in operating activities (434,891) (340,295) (671,096)
Cash flow from investing activities
Payments for purchase of property,
plant & equipment - - (64,076)
Proceeds on disposal of property,
plant & equipment - - 46,075
Payments for exploration expenditure (280,447) (641,391) (1,655,036)
Net cash used in investing activities (280,447) (641,391) (1,673,037)
Cash flow from financing activities
Proceeds from issue of share capital 1,052,236 873,462 1,470,898
Net cash flow from financing 1,052,236 873,462 1,470,898
activities
Net increase/(decrease) in cost and
cash equivalents 336,898 (108,225) (873,235)
Effect of exchange rate fluctuations (45,550) - 120,158
on cash held
Cash and cash equivalents at the
beginning of the period. 747,998 1,501,075 1,501,075
Cash and cash equivalents at the end
of the period 1,039,346 1,392,850 747,998
Mariana Resources Limited and its controlled entities.
Notes to the Condensed Financial Statements for the half-year ended
30 June 2009
NOTE 1 General information and accounting policies
General information.
These condensed interim financial statements are for the period 1
January 2009 to 30 June 2009.
The financial reports for the half-years ended 30 June 2009 and 30
June 2008 are unaudited, and do not constitute statutory accounts.
This condensed interim financial report does not include all the
notes of the type normally included in an annual financial report.
Accordingly, this report is to be read in conjunction with any public
announcements made by Mariana Resources Limited during the interim
reporting period. This half-yearly financial report is in compliance
with International Accounting Standard (IAS) 34: Interim Financial
Reporting.
(a) Basis of preparation of the half-year financial report
These condensed financial statements have been prepared under the
historical cost convention. The same accounting policies and methods
of computation are followed in the half-yearly financial report as
for the last annual financial report
(b) Segment Reporting
The Mariana Resources Limited group has a single business segment,
namely minerals exploration. The Group reports by geographical
segment. During the period the group had activities in Ecuador,
Chile, Argentina, Australia and Guernsey.
(c) Basis of consolidation
The consolidated condensed financial statements incorporate the
assets and liabilities of all entities controlled by Mariana
Resources Limited and the results of all controlled entities for the
period. Mariana Resources Limited and its controlled entities
together are referred to in this financial report as the consolidated
entity. The effects of all transactions between entities in the
consolidated entity are eliminated in full.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date
that control ceases.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group.
(d) Earnings per share
Basic earnings per share
Basic earnings per share is determined by dividing net loss after
income tax attributable to members by the weighted average number of
ordinary shares outstanding during the financial period.
Diluted Earnings per Share
As the company incurred a loss for the half year, basic earnings per
share and diluted earnings per share are the same.
NOTE 2 SEGMENT INFORMATION
The consolidated entity operates predominantly in the mineral
exploration industry, in Argentina and Chile.
NOTE 3 ISSUED CAPITAL
The total number of ordinary shares of .01 pence on issue at 30 June
2009 was 104,494,235 (31 December 2008: 67,806,868). Movements in
issued shares during the half year were:
Issued shares at 31 December 2008
67,806,868
Placement at 3 pence per share May, June 2009. 36,687,367
Issued shares at 30 June 2009.
104,494,235
NOTE 4 OPTIONS
At 30 June 2009 the company had 13,724,348 options on issue (31
December 2008: 12,279,348), each of which entitles the holder to
receive on exercise, one ordinary share in the company. Movements in
options during the half-year were:
Outstanding at 31 December 2008 12,279,348
Issued during the half-year
4,395,000
Expired or cancelled during the half-year
2,950,000
Outstanding at 30 June 2009. 13,724,348
NOTE 5 RELATED PARTY TRANSACTIONS
Directors John Horsburgh, John Sutcliffe and Ray Angus subscribed for
4,333,667 shares at 3 pence per share in the placement in May/June
2009.
On 30/06/2009 the company issued 1,295,000 options to employees under
the company's Employee Option Plan, exercisable at 6 pence per
share. Of these 865,000 expire on 30/6/2013, 310,000 expire on
31/10/2012, 100,000 expire on 31/1/2012 and 20,000 expire on
31/5/2011.
Directors also received 1,100,000 options on 30 June 2009 on the same
terms as those issued under the employee share plan and 1,650,000
options held by directors were cancelled.
The former subsidiary Compania Minera Mariana SA (CMM) , incorporated
in Ecuador, was sold on 30 June 2009. CMM did not contribute to the
consolidated loss for the period ended 30 June 2009.
NOTE 6 INTANGIBLE ASSETS
All costs directly relating to the acquisition, exploration and
development incurred by the company or its subsidiary undertakings on
its mineral properties are carried as intangible assets until such
time as it is determined that there are commercially exploitable
reserves at which time such costs will be transferred to tangible
fixed assets to be amortised over the expected productive life of the
asset. Such costs include appropriate technical and administrative
expenses but not general overheads. The directors periodically
review the intangible assets for impairment and where a project is
abandoned or is considered not to be economically viable, the related
costs are written off. In 2008 the Ecuador government announced a
new mining act. Due to the changes the Company has withdrawn from
exploration in Ecuador and has sold the Ecuador subsidiary Compania
Minera Mariana SA.
NOTE 7 POST BALANCE SHEET DATE EVENTS
There have been no significant events since balance sheet date. For
news releases go to the company's web site at
www.marianaresources.com.
Signed by authority of the Board.
J. R. Horsburgh
Chairman
30 September 2009
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