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viewMirasol Resources Ltd.

Mirasol Resources looking to hit pay dirt in South America

Snapshot

The company’s portfolio is comprised of nearly 40 gold, silver and precious metal projects in Chile and Argentina

Mirasol Resources Ltd. -

Quick facts: Mirasol Resources Ltd.

Price: 0.42 CAD

TSX-V:MRZ
Market: TSX-V
Market Cap: $22.73 m
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  • A project generator and exploration company
  • Portfolio includes nearly 40 gold, silver and precious metal projects in Chile and Argentina
  • Holds about $20 million in the bank with no debt

What Mirasol Resources does:

Mirasol Resources Ltd (CVE:MRZ) (OTCMKTS:MRZLF) is a project generator and exploration company with gold, silver and precious metal properties in Chile and Argentina. 

The company’s portfolio includes partnership projects in northern Chile as well as six deal-ready projects and more than 30 pipeline projects in both Chile and Argentina.

As a project generator, Mirasol teams up with quality partners and uses leading-edge technologies and geoscience to discover high-quality exploration targets.

The company first secures ownership of the property, completes preliminary exploration work and defines drill targets. Then Mirasol will assess the risk-reward trade-off to determine whether to invest further by drill-testing the property or to option it via an earn-in agreement with a mining partner. 

In these partnerships, the partner - typically a well-funded major mining company - invests its own money over several years in Mirasol-owned properties, saving Mirasol from risking its own money as it retains exposure to a potential discovery and generates an income stream.

Led by CEO Norman Pitcher, a professional geologist, Mirasol’s management team has decades of experience in the geological terrains and deposit types common to Chile and Argentina. Also, the Mirasol team has extensive knowledge and experience in claims management, permitting regimes and community/government relations in both countries.

Mirasol’s head office is located in Vancouver, British Columbia, and the company has local offices in both Mendoza, Argentina and Santiago, Chile.

How is it doing:

Mirasol is in a strong financial position. It has around $20 million in the bank and no debt. And its partnership structure allows the company to maintain a tight share structure under which company insiders hold 28% of the 54 million shares outstanding. 

In February 2019, Mirasol appointed Norman Pitcher, the former president of Eldorado Gold Corporation (NYSE:EGO), to replace Stephen Nano, who served as its CEO since 2014 and continues to be a director and advisor to the company.

The company’s portfolio is comprised of nearly 40 projects, some deal-ready and others in the pipeline. It also has several earn-in projects ongoing in northern Chile. 

Mirasol’s project generation efforts are focused on two highly productive mining regions: the Atacama-Puna region of northern Chile, and the Santa Cruz Province in southern Argentina. These regions are richly endowed with mineralization and have world-class gold, silver and copper mines operated by some of the world’s largest mining companies. 

In the Atacama region of Chile, the company owns 100% of the exploration claims --- some of which include earn-in partners. 

With the Altazor and Gorbea projects, Mirasol has teamed with a subsidiary of Newcrest Mining Limited (OTCMKTS:NCMGY), which is funding and operating both gold projects. 

Newcrest can buy, in stages, up to 75% of the Gorbea gold project. It must spend a minimum of US$4 million and has drilled seven diamond holes for a total of 3,148 meters and is currently on its eighth drilling program. Assay results are “encouraging.”

At Altazor, Newcrest reinitiated surface exploration in the first half of 2019 and expects to start a 2,225-meter diamond drilling program during the current field season. 

Mirasol kicked off 2020 by announcing an option deal to buy the Inca gold project in Chile from another mining major, Newmont Corporation (NYSE:NEM), where exploration to date has been limited to surface work and prospecting. 

Mirasol has five years to earn-in up to 100%, subject to a 1.5% net smelter royalty, but it must drill 1,000 meters over two years and incur US$3 million in exploration costs over five years. Upon completion, Newmont will have the right to earn back 70% of the project, in two stages by paying US$3 million in cash to Mirasol, and funding US$6 million in exploration over three years.

In October, the company added another earn-in partner, First Quantum Minerals Ltd (TSE:FM), for its Coronacion copper and gold project in Chile. First Quantum has the option to earn-in 80% of the project over six years by making annual cash payments totalling US$875,000, completing at least 10,000 meters of drilling and delivering a pre-feasibility study report. 

Mirasol soon followed up that deal with another partnership announcement. The company signed an earn-in deal with Mineria Activa, a Chilean private-equity fund focused on mining. Mineria has the option to buy 100% of Mirasol’s Nord copper, gold and silver project over four years but must make annual cash payments totalling US$3 million and complete at least US$500,000 worth of exploration during the first two years.

CEO Pitcher said Gorbea and another Chile-based gold (and silver) project, Los Amarillos, and the Sascha-Marcelina gold and silver project in Argentina so far show the greatest promise for the company.   

Mirasol achieved positive surface exploration for gold and silver based on rock-chip samples at three prospect sites at the self-funded Sascha-Marcelina project. The company is currently searching for a partner to drill the test project.

At Los Amarillos, the company has signed an option to purchase agreement with Empresa Nacional de Minería of Chile to consolidate and gain control of additional claims. To date, the self-funded project has returned high-grade gold and silver assays in rock-chip samples. Mirasol will fund a trenching program expected to start by year’s end or in early 2020. Drilling will start next year if results come back positive. 

Inflection points:

  • Searching for a partner to drill test project at Sascha-Marcelina in Argentina 
  • Eyeing results from drilling program at Gorbea at trenching program at Los Amarillos
  • Expecting Newcrest to start drilling at Altazar during current field season
  • Create more exploration partnerships to increase drilling programs

What the boss says:

“The reason we’re anywhere is based on geology,” according to Mirasol CEO Norman Pitcher.

“You go where the geology is prospective, and certainly in both Chile and Argentina, we’re pretty sure the geology is prospective because there are already multiple of deposits and mines there. So we’re looking at the terrain that has already produced economic deposits.”  

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