MMC - Marengo Mining

[imajica]

3 October 2006


ASX RELEASE

INITIAL 371 MILLION TONNE RESOURCE FOR
YANDERA COPPER-MOLYBDENUM PROJECT (PNG)

Marengo Mining Limited (ASX Code: MGO) is pleased to announce a
preliminary mineral resource statement for the central portion of its 100%
owned Yandera Copper - Molybdenum Project, located in Madang Province,
in Papua New Guinea (see Figure 3).

Inferred Resource of 127 Million Tonnes @ 0.7% Copper Equivalent
(at 0.5% Copper Equivalent cut-off), which equates to 1.96 billion
pounds of contained copper metal equivalent, or an

Inferred Resource of 371 Million Tonnes @ 0.49% Copper
Equivalent (at 0.3% Copper Equivalent cut-off), which equates to 4.01
billion pounds of contained copper metal equivalent.

A similar tonnage of mineral inventory has been established for each cut-off.
However this cannot be placed in a resource classification at this stage. It is
Marengo's intention to focus its efforts on establishing sufficient information, to
enable for the conversion of as much of this mineral inventory into a resource
category as possible, in subsequent resource estimations.

This preliminary resource statement has been prepared by respected
international mining consultancy group, Golder Associates Pty Ltd, which has
extensive experience in all facets of the mining and resources industry. It is
based on 98 diamond drill holes completed during the 1970's by BHP Limited
and others, and the first 7 diamond drill holes completed by Marengo as part
of its current resource drilling program. The full text of the Golder Associates
preliminary resource statement is attached as Appendix 1.

Following the excellent results of the initial resource estimate, Marengo also
today announces the commencement of a pre-feasibility study on the Yandera
Project, as well as further results from its ongoing program of resource drilling,
which have not been included in the current resource estimate.

 

[Brasidas]

Re: MGO - Marengo Mining

Minesite story discusses the rise and fall of the share price and the potential for a larger resource.

Marengo Mining Pushes Its Copper Mountain Uphill

By Our Man In Oz

When you’re sitting on a copper mountain valued at US$14 billion it is reasonable to expect a world short of the red metal to take notice. That was the case, but only briefly, when earlier this month Marengo Mining produced the first mineral resource estimate for its Yandera project in Papua New Guinea, a rather handsome 371 million tonnes of material assaying 0.49 per cent copper for a metal inventory of 4.01 billion pounds. From a lacklustre A25 cents, the Australian-listed Marengo jumped to A35 cents on October 3, its highest since mid-year.

Since that flurry Marengo has dropped off investor radar screens, slipping back to the mid-20 cent range despite an exploration program which promises to continue boosting the Yandera resource, followed by the production of a pre-feasibility study and preliminary mine design. What the market seems to be missing is that there are signs of certainty growing at Yandera which could lead either to the development of a major copper and molybdenum project, or spark a takeover bid from a major miner looking for future sources of supply.

Marengo chief executive, Les Emery, doesn’t like the comparison but there is a parallel to be drawn between what he’s doing and what happened at Tethyan Copper. At this time last year, Tethyan was also a largely unknown Australian-based explorer with its foot on a monster copper project. The only difference was that Tethyan’s copper was in an even less stable part of the world, a place called Reko Diq in western Pakistan. That location, which had weighed heavily on the wallets of potential investors, was not a factor in the bidding duel that developed between a joint venture of two of the world’s biggest miners, Canada’s Barrick Gold and Chile’s Antofagasta, in competition with a small Hong Kong-based merchant bank, Crosby Capital.

From a price of around A40 cents, about as lacklustre as Marengo today, Tethyan was steadily bid up to A64 cents (the initial offer), then A77.5 cents by Crosby, and then A$1.20 by the Antofagasta/Barrick consortium, to A$1.35 by Crosby, and finally A$1.40 by the big boys who managed to knock the Hong Kong upstart out of the ring – though not before the duel had added A$1 a share to Tethyan’s price, an impressive gain of 250 per cent over 10 months of bidding. Minesite first drew the Tethyan comparison when it last looked at Marengo in April. It was a good theory then, and it’s better today because the last time around Marengo lacked the all-important resource estimate produced to the standard required by the Joint Ore Reserves Committee, under its so-called JORC code.

The first JORC compliant resource estimate for Yandera comes after several attempts to demonstrate that the project, located close to the Ramu nickel/cobalt prospect of Highlands Pacific and its Chinese partner, is a mine in waiting. The original work at Yandera dates back to drilling by BHP in the 1970s, a time that preceded the modern JORC standard of reporting. What Marengo has done is secure title to 100 per cent of the tenement areas covering Yandera, re-assess the original BHP work, and start a drilling program of its own. So far, everything is pointing to a massive mineralised structure, as highlighted in some of the latest drill cores which include intersections as wide as 240 metres, assaying 0.67 per cent copper and 217 parts per million molybdenum: a grade equivalent to 0.89 per cent copper.

Thick hits of copper and molybdenum have been the norm at Yandera since BHP’s days. The difference is that this time around the copper market is completely different, price and demand are strong and, more importantly, big new sources of supply are scarce. Emery, who was travelling when Minesite called , has been telling potential investors in a series of presentations that pre-feasibility work has started at Yandera, along with a continued drilling programme. “The initial resource estimate was completed ahead of the company’s original schedule,” Emery said.. “It was based on 98 diamond drill holes completed during the 1970s by BHP and other former explorers, and the first seven diamond drill holes completed by Marengo.”

Significantly, the latest big hit, the 240metres at an equivalent of 0.89 per cent copper, was not included in the resource estimate because the results arrived too late. Assays are also due to be received from a number of other drill holes with Marengo having completed 13 and with eight more remaining to be drilled, or are in progress. Emery said the resource estimate confirmed Yandera as “a potentially world class mining project” with significant potential for further additions to the mineral inventory as drilling continued. The plan is to run the pre-feasibility study at the same time as the drilling programme.

“Our efforts will be focused on converting as much of the mineral inventory into a resource category as soon as possible, as part of subsequent resource estimations,” he said. “In addition, drilling will target near-surface zones with the potential to maximise cash flow in the early stages of mining operations.” As part of the process, a feasibility study manager has been appointed with his work to include overseeing preliminary mine design, open pit optimisation, metallurgical testing, plant flowsheet design plus capital and operating cost estimates.

It’s the combination of on-going drilling, the upgrade of resource estimates into higher categories, and the start of detailed mine planning which will make 2007 the most significant in Marengo’s short life – and all the while, ticking away in the background, is the fate of Tethyan; a fate that not too many investors would object to!

http://www.minesite.com/storyFull5.php?storySeq=3892

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

With a surging copper price and an already impressive JORC and a tiny market cap I like the look of MGO,

I read that a new JORC is due out soon, so I'd say in the next 4 weeks I'd expect MGO to test 40c +

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

Well MGO has been on the move of late rising from the 20c level to test the 30c level,

Just read a DJ Charmichaels report that has value of 45c MGO

We recommend MGO as a Speculative BUY to risk tolerant investors with a
medium term investment horizon. We have a 12 month price target of $0.45
per share, in anticipation of an increase in resources and scoping study results.
Any discovery of higher grade within the deposit, will surprise on the upside.

Interesting read

http://www.marengomining.com/reports/rr070403.pdf

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

MGO​

Mkt Structure

Shares
125m
65m 20c 28/2/08 Options

Mkt Cap @ 20c = $38m (Includes $13m worth of options)
Mkt Cap @ 30c = $57m (Includes $13m worth of options)
Mkt Cap @ 40c = $76m (Includes $13m worth of options)
Mkt Cap @ 50c = $95m (Includes $13m worth of options)


Cash
$8m + $13m from opies = $21m


Projects

Yandeera Copper/Moly + Gold, 100%, PNG

This project has had something like $30m spent on it be previous explorers such as BHP who left the project in the 1970's due to very low commodity prices,

BHP outlined a resource of 1.143 Billion tonnes @ 0.33% Copper + 0.015% Moly = 0.5% Copper Equiv

Marengo did some intial work last year to confirm all the previous work and estimates and came out with a first pass intial JORC of 371Mt @0.35% Cu + 0.014% Moly = 0.49% Cu Equiv

A new JORC is due out very shortly and should be in the order of say 500Mt-600Mt@0.5-0.6% Cu Equiv

Its only a matter of time however before MGO deliver a 1Billion tonne + JORC grading 0.5% Cu Equiv as we know its there, its just not JORC compliant as the estimation was done pre 2004 when the JORC code was introduced.

Of significant importance is the fact that about 30kms to the North, Chinese firms are developing the large Ramu Nickel Mine and thus alot of the infrastructure costs such as power roads and even transport are mostly taken care of.




Value Comparison
The most obvious comparison is with PMH, Pac Mag which went from 20c - 60c over 2 days after releasing a JORC for its Ann Mason deposit in Nevada, it was 810Mt@ 0.44% Cu Equiv, HOWEVER PMH's deposit has about 100m - 200m of overburden soil, ie the mineralisation doesn't really start until you get 100-200m down, thats alot of top soil/waste soil

In contrast MGO's Yandeera's mineralisation is from surface! ie very very low waste and top soil

Now PMH at 50c = Mkt Cap of $75m
@ 75m MGO should be at 40c


Yandeera EV (Take Over value)

Now the best way to value a large Copper deposit is on an EV per lb basis, generaly speaking large copper deposits have an EV per lb basis of between 2.5c as an absolute minimum all the way up to say 25c per lb based on grade, how deep the deposit is, infrastrucutre, risk and so on



Using the lowest EV of 2.5c per lb and Yandeera's current 4Billion lb's Copper Equiv = $100m = 50c MGO

Assuming the New JORC comes in at say 500Mt@0.5% Cu Equiv = 5.5Billion lb's Cu Equiv @ 2.5c per lb = $137.5m = 72c MGO



Valuation

Current EV Yandeera = $100m
Expected New JORC = $137.5m

Cash + Options = $21m



Current Value = $121m = 63c

Expected New Value = $158.5m = 83c



Summary

There is alot of info on MGO's web page so if your curious where I got alot of my information from go there,

There is also a few articles out there that recommend MGO as the next Tethyan Copper type takeover,

For some reason the Aussie Mkt sees PNG as risky which is crap, the country depends on mining for its GDP so it will always assist, moreover it is corrupt so if you allign Govt and Company interests you won't have any problems, the PNG gov't super fund has invested in MGO so I'd say the Gov't will ensure MGO gets approvals for everything they need so as to maximise MGO value

Finally MGO is looking to list on the TSX or North American mkt later this year, management have been told that given their current position where they listed on say the TSX their Mkt Cap would be 2-3x what it is now.

I expect a NEW JORC soon as well as more spectacular drilling intersections ie 81m at 2.39% Cu Equiv

Enjoy

 

[mick2006]

Re: MGO - Marengo Mining

Recently looking into the rise in price for molybdenum and started looking for companies with large resources and then came to MGO. Massive copper and molybdenum resources currently valued in ground at $18 billion dollars at the Yandera deposit in PNG. With current drilling well underway should see resource upgrades in the coming weeks.

The Yandera deposit in PNG is massive and world class, also 5 months into the pre-feasability study which is due to be completed in June.
If the pre-feasability study highligts a profitable large scale mining operation it could be safe to assume a re-rating of MGO due to the fact they have a massive resource which would no longer just be sitting in the ground but a viable long term project.

With massive in ground value and $10 million in the bank to expand the resource any good news would certainly put MGO firmly in focus of some of the larger miners looking for World Class Deposits!!


Anyone out there holding or keeping an eye on MGO?

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

Rising today oin antcipation of the new jorc,

Interestingly the latest qtrly highlighted just how much Moly the company has and with Molybdenum becoming the Hot Metal for 2007 I expect Marengo to attract alot more interest, especially when the new jorc is released

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

Resource review to firm Marengo’s place in PNG

30th April 2007, 8:30 WST


The next fortnight is shaping as a big one for Les Emery’s New Guinea copper-molybdenum hopeful Marengo Mining as it pursues its quest to develop the Yandera project, about 450km north-west of Port Moresby.

Originally discovered by US miner Kennecott and BHP in the 1970s, the big project has suffered a series of false starts over the years and is now in the hands of its seventh operator.

Coincidentally, that bodes well for the project this time around. Mr Emery’s Lynas Gold was also the seventh company to own the Lynas Find gold project when it successfully commissioned the Pilbara’s first commercial gold mine more than a decade ago.
Yandera is already a substantial deposit, based on Marengo’s initial resource estimate released last October of 371 million tonnes grading 0.35 per cent copper and 0.014 per cent molybdenum, a steel hardening agent increasingly seen by the stainless steel industry as a costeffective substitute for nickel.

With copper prices remaining at heady levels above $US7800 a tonne and “moly” back on the rise above $US30 a pound ”” six times higher than the price three years ago ”” Marengo estimates that the existing resource of 2.9 billion pounds of copper and 170 million pounds of moly already boasts an in-ground value of $18 billion.

But that figure should be blown aside when the company completes a revised resource estimate in the next few days, which Marengo hopes will come in around the 500 million tonne mark at a copper equivalent grade of about 0.5 per cent.

From that, Marengo hopes to outline reserves of at least 200 million tonnes ”” the minimum it needs to sustain a 20 million tonnes a year mine for 10 years.

But even that will not fully encapsulate the true scale of the Yandera project, given the resource will be based on just three of the eight known major deposits at the project, which is generally considered one of the biggest untapped copper deposits in the South Pacific.

Nonetheless, that should be sufficient for a successful conclusion to a pre-feasibility study by late June into a “starter” mine producing around 100,000 tonnes of copper in concentrate a year with a likely price tag of $750 million to $1 billion.

Marengo plans to crush all ore on site, and carry it down the mountainside via a 30km conveyor. From there it will be shipped to a concentrator on the coast by way of a dedicated 100km railway.

According to Mr Emery, the near unrivalled moly content of the Yandera deposits will enable Marengo to produce a separate moly concentrate that will account for about 40 per cent of the mine’s revenue.

It is also now evaluating the potential to cash in on Yandera’s high concentration of another little known exotic metal, rhenium. A key ingredient in catalytic converters and “super-alloys” used to make jet engine components, rhenium is currently trading at more than $US7000/kg.

Though BHP recorded high rhenium values in a number of assays in the 1970s, it never carried out follow-up work.

It is understood that Marengo has since completed fresh assays which have confirmed the significant rhenium content associated with higher grade zones of moly, that should generate significant additional credits from concentrate customers.

Buoyed by strong market support for junior-led mining developments, Mr Emery is confident Marengo will be able to develop Yandera without bringing in a “big brother” partner.

Mr Emery said Marengo was probably “about three years behind” Perth neighbour Equinox Minerals, which has become the standard-bearer for the junior sector after raising more than $500 million to develop its massive Lumwana mine in Zambia and is now valued at over $1 billion.

JOHN PHACEAS

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

Another 500k traded today at or above 30c, looks like a new support level may form around 30c, still has a bit of work to do, but if it does it will be an excellent launching pad for the new JORC due out in less than 2 weeks

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

Hardly any sellers left, looks like the insiders know the NEW JORC is very good,

See below for my thoughts on where MGO can/should end up, as a note PMH rallied from 20c to 60c in 2 days when the mkt became aware of its similarily large Copper/Moly project, similar share structures MGO and PMH

MGO​

Mkt Structure

Shares
125m
65m 20c 28/2/08 Options

Mkt Cap @ 20c = $38m (Includes $13m worth of options)
Mkt Cap @ 30c = $57m (Includes $13m worth of options)
Mkt Cap @ 40c = $76m (Includes $13m worth of options)
Mkt Cap @ 50c = $95m (Includes $13m worth of options)


Cash
$8m + $13m from opies = $21m


Projects

Yandeera Copper/Moly + Gold, 100%, PNG

This project has had something like $30m spent on it be previous explorers such as BHP who left the project in the 1970's due to very low commodity prices,

BHP outlined a resource of 1.143 Billion tonnes @ 0.33% Copper + 0.015% Moly = 0.5% Copper Equiv

Marengo did some intial work last year to confirm all the previous work and estimates and came out with a first pass intial JORC of 371Mt @0.35% Cu + 0.014% Moly = 0.49% Cu Equiv

A new JORC is due out very shortly and should be in the order of say 500Mt-600Mt@0.5-0.6% Cu Equiv

Its only a matter of time however before MGO deliver a 1Billion tonne + JORC grading 0.5% Cu Equiv as we know its there, its just not JORC compliant as the estimation was done pre 2004 when the JORC code was introduced.

Of significant importance is the fact that about 30kms to the North, Chinese firms are developing the large Ramu Nickel Mine and thus alot of the infrastructure costs such as power roads and even transport are mostly taken care of.




Value Comparison
The most obvious comparison is with PMH, Pac Mag which went from 20c - 60c over 2 days after releasing a JORC for its Ann Mason deposit in Nevada, it was 810Mt@ 0.44% Cu Equiv, HOWEVER PMH's deposit has about 100m - 200m of overburden soil, ie the mineralisation doesn't really start until you get 100-200m down, thats alot of top soil/waste soil

In contrast MGO's Yandeera's mineralisation is from surface! ie very very low waste and top soil

Now PMH at 50c = Mkt Cap of $75m
@ 75m MGO should be at 40c


Yandeera EV (Take Over value)

Now the best way to value a large Copper deposit is on an EV per lb basis, generaly speaking large copper deposits have an EV per lb basis of between 2.5c as an absolute minimum all the way up to say 25c per lb based on grade, how deep the deposit is, infrastrucutre, risk and so on



Using the lowest EV of 2.5c per lb and Yandeera's current 4Billion lb's Copper Equiv = $100m = 50c MGO

Assuming the New JORC comes in at say 500Mt@0.5% Cu Equiv = 5.5Billion lb's Cu Equiv @ 2.5c per lb = $137.5m = 72c MGO



Valuation

Current EV Yandeera = $100m
Expected New JORC = $137.5m

Cash + Options = $21m



Current Value = $121m = 63c

Expected New Value = $158.5m = 83c



Summary

There is alot of info on MGO's web page so if your curious where I got alot of my information from go there,

There is also a few articles out there that recommend MGO as the next Tethyan Copper type takeover,

For some reason the Aussie Mkt sees PNG as risky which is crap, the country depends on mining for its GDP so it will always assist, moreover it is corrupt so if you allign Govt and Company interests you won't have any problems, the PNG gov't super fund has invested in MGO so I'd say the Gov't will ensure MGO gets approvals for everything they need so as to maximise MGO value

Finally MGO is looking to list on the TSX or North American mkt later this year, management have been told that given their current position where they listed on say the TSX their Mkt Cap would be 2-3x what it is now.

I expect a NEW JORC soon as well as more spectacular drilling intersections ie 81m at 2.39% Cu Equiv

Enjoy

 

[ta2693]

Re: MGO - Marengo Mining

Funny, why people pay 37.5c to buy share rather than pay 15c to buy option and convert to shares, save 2 cents. Interesting.

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

Just had another look at the qtrly, New JORC is not coming out for at least another week I would have thought, but more drill assays are due, these assays are from drill holes which targeted the intersection that was 39m@3.54 g/t Gold I'd say there news leaking from these assays as there is just wayy too much volume going through, Kennas reckons a 50c target, which is quite possible once new JORC is out considering similar play PMH (same share structure) went from 20c to 60c in 2 days!

 

[Pat]

Re: MGO - Marengo Mining

People are buying big chunks this morn. That 70K sell just got munched in 5 mins.
It's a gold rush?
Chasing, chasing chasing.

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

At 12noon it went quiet and the stock has been quiet since, no real selling, no real buying,

This reminds me of JMS and BCN both of which had large runs on a day where they rose in the AM then were quiet around 12noon till 2pm then went really nuts 2pm to 4pm

Of course stock could have run out of steam for today, but I eagerly await 2pm/2.30pm to see what happens

 

[UPKA]

Re: MGO - Marengo Mining

I think its the case where people with inside information jumped on the stock in the morning, got what they wanted, then the rest js settled, because the rest of us have no idea wats going on.

 

[Pat]

Re: MGO - Marengo Mining

The market depth as of 1:30 pm looks strong on the buy side. Some big sells waiting but the sell side looks weak. A lot more buyer's out there today.
Perhaps a little frenzy before close, maybe close at a high?

 

[UPKA]

Re: MGO - Marengo Mining

The last time when theres a surge in SP with similar volume was in 03/10/06, the price surged 20% in 2days, that was before the feasibility study was released. So looking at the 20% jump today, iI dont think it'll go any higher today. Possible a drop tomorrow, well lets hope not!!

 

[YOUNG_TRADER]

Re: MGO - Marengo Mining

The last time when theres a surge in SP with similar volume was in 03/10/06, the price surged 20% in 2days, that was before the feasibility study was released. So looking at the 20% jump today, iI dont think it'll go any higher today. Possible a drop tomorrow, well lets hope not!!

True, but alot has changed since then, primarily

1. The NEW JORC will be close to 50% bigger

2. Molybdenum is a very important metal (DGR case in point)

3. The North American and Canadian Insto's are now watching courtesy of MD going all over there + London to do presentations

Remember 40c is all time high, if it clears it then its into to blue skies and you can throw away your rule book because once stock is in Blue Skies it can do anything

 

[surfingman]

Re: MGO - Marengo Mining

I was checking out there website an interesting video presentation by director Les Emery.

Stating pre-feasibility study due in june and bankable feasibility study 12 - 18 months on the Yandera Project, upgrades on Yandera Project deposits possibly up to 2x this year.

http://clients.westminster-digital....ite/events/40/video/index.aspx?companyID=40_3

 

[ta2693]

Re: MGO - Marengo Mining

"PNG gov't super fund has invested in MGO so I'd say the Gov't will ensure MGO gets approvals for everything they need so as to maximise MGO value"

I have experience dealing with corrupted government. I can not agree with you more.