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Mariana shares rise on the back of positive Calandria Sur update

Shares in Mariana Resources (LON:MARL) were given a boost this morning by the latest drilling results, which confirmed the company’s Calandria Sur prospect in Argentina as a bulk tonnage silver and gold deposit.

The news prompted FinnCap, the company’s broker,  to increase its price target on shares in the miner to 64 pence from 48 pence (current price 52 pence).

Analyst Joe Lunn said: “For us, the release of the second and final batch of assays from mostly infill holes at the Calandria Sur goldfield in Patagonia, increases our confidence that the preliminary resource, now due in the first or second quarter, will not disappoint. 

“In anticipation that the majority of this forthcoming resource will be sufficiently de-risked to be classified as indicated, along with high gold prices, we increase our valuation.”

Earlier Mariana gave the results of its final drilling campaign of 2010 and updated on what promises to be a very busy start to 2011.  

The remaining  28 holes of the 55-hole Calandria Sur programme produced a 104 metre intersection at 1.3 grams per tonne of gold and 19 grams of silver.

Other results included 102 metres at 1 gram of gold and 18 grams of silver and 76 metres at 1.3 grams of gold and of silver.

Mineralisation remains open to both the north-west and north-east.

Modelling of Calandria Sur will begin later this month and the company hopes to have compiled a resource estimate in the first or second quarter.

FinnCap’s Lunn said: “We feel increasingly confident that our initial guidance on the resource size at Calandria Sur, at 500,000 ounces of gold, will prove to be a conservative estimate. 

“However, we maintain this forecast, along with a nominal 100,000 ounces for Calandria Norte, resulting in a total potential resource of approximately 600,000 ounces of gold.”

Calandria Sur is just one part of the Las Calandrias Project in the Patagonia.

The company is still to update on the bonanza gold grades at Calandria Norte. 

Drill testing of high-grade vein-breccia targets has been completed and the results of 19 holes programme are imminent.

Elsewhere on Las Calandrias, exploration drilling is underway at the El Nido prospects with two rigs testing new targets, including Nido Norte and Nido Oeste, with the first results expected in mid February 2011.

Chairman John Horsburgh said: "These results further confirm the bulk tonnage potential at Calandria Sur and show the areal extent of +10g-m gold mineralisation to be 600m long by up to 300m wide.  

“Resource modeling is commencing this month which will lead to a preliminary NI 43-101 resource estimate in the first or second quarter of 2011.

"Drill results from Calandria Norte bonanza grade targets are expected shortly.   

“Additionally, emphasis has already shifted to exploration drilling of encouraging  3D IP targets at El Nido, including Nido Norte and Nido Oeste.

“Drill targeting is also in progress for the Nido Sur area following very positive 3D IP results from the second survey block.  

“These excellent prospects  all offer scope to enhance the economic potential of Las Calandrias and we can look forward to further drill results over the next quarter." 

The shares hit a new high of 55.5 pence earlier in the session but pared some of those gains to trade a penny higher at 52 pence each. Early in 2011, the stock was changing hands at 15.75p.