We’re talking about the discovery and ongoing development of two emerging gold projects in northwestern Argentina. One of which also hosts significant quantities of copper and boasts the potential to be a world-class deposit of epic proportions.

 

Indeed, with a targeted resource of up to one billion tonnes of gold and copper resources, the Rio Grande Project certainly represents a tantalizing trump card. The deposit also appears to be amenable to cost-efficient bulk tonnage, open-pittable (quarry like) mining.   

 

In due course, Rio Grande may yet make Mansfield the toast of Canada’s investment community. However, before we get too excited, it should be noted that the daunting task of proving up such a prospectively huge deposit is still in its relatively early stages.

 

The first major milestone in the quest for a major mine involves the drill-defining of around 250,000,000 tonnes (involving just one quadrant of the deposit). This isn’t expected to be completed until the latter part of this year. So at this time, shrewd investors are advised to regard Rio Grande as analogous to a valuable share purchase warrant.

 

Meanwhile, the Company’s near-term fortunes are being shaped by the progress of a far more easily manageable mineral asset – the wholly-owned and well-developed Lindero Gold Deposit.

 

This emerging golden treasure trove is no overnight success story in the making. Mansfield can take sole credit for making this important discovery as far back as 1999. That was in the early days of the Company’s geological sleuthing in northwest Argentina, which at the time represented one of the world’s largest mineral-rich virgin frontiers for exploring for major gold finds.

 

Since then, the Company has steadily delineated an ever-increasing gold resource that appears to be well on its way to becoming an approximately $1.5 billion-plus “in-situ” mineral asset (before recovery costs of around $550 million).

 

This is based on the sound hypothesis that Lindero hosts at least two million gold ounces. Then there’s the geological icing on the cake, which is now beginning to present itself in the form of near-surface high-grade feeder zones.

 

Meanwhile, there are a number of other key dynamics that are already in place to ensure a very bright future for Mansfield Minerals. Not the least of which is the fact that it benefits from a strong, seasoned management team that is both technically adept and consistently demonstrates impressive business acumen.

 

This reality is demonstrated by the shrewd implementation of a finely-calibrated risk/reward formula for the Company. One that offers significant leverage to technical and financial success with two major projects, while also significantly mitigating financial risks by farming-out considerable portions of exploration costs. 

 

By way of explanation, Mansfield’s decision to “go it alone” with the wholly-owned Lindero Project now offers to reward investors with a handsome financial windfall. This is in the likely eventuality that this valuable asset is bought-out by a well-established gold producer which could happen as early as Q2 or Q3 of this year. 

 

Meanwhile, the decision to pass on most of the early exploration and developmental costs to an equal joint venture partner at Rio Grande also offers Mansfield significantly leveraged exposure to what is shaping up to be a “world class” prospect.

 

All of this has been achieved over the last dozen or so years with minimal dilution to the Company’s relatively tight share structure (with about 44.0 million shares outstanding and about 53.0 million fully diluted at this time).

 

Indeed, a tight share structure, matched with the prospect of especially positive news flow this year, promises to be a potent catalyst to higher share price multiples. This has certainly already proved to be the case with Mansfield during the last couple of years.

 

Lindero: Outlining 2.0 Million Gold Ounces in 2008

A landmark development is fast approaching at the Lindero Deposit. It involves the upcoming formulation of a National Instrument 43-101 compliant preliminary resource estimate that is expected to be published in late Q1 or early Q2 of this year. This should essentially validate the Company’s long-stated targeting of a resource base of around two million gold ounces.

 

As yet, the Company has not had sufficient drilling data to satisfy Canadian federal government recognized guidelines for a NI 43-101 compliant “measured resource” of this magnitude. But that is about to change.

 

All of the Company’s drilling to date – involving around 115 holes spanning more than 30,000 metres – has finally provided a comprehensive insight into Lindero’s overall size, scope and grade distribution.

 

Additionally, Mansfield has recently completed a benchmark in-fill drilling program. Much of which was aimed at outlining near-surface open-pittable resources, particularly among a number of newly-discovered, high-grade feeder zones.

 

These enriched zones are the result of concentrated high-grade gold mineralization percolating upwards by way of fissures or cracks from much greater depths. These include some sweet spots where mineralization runs as high as 10 g/t of gold over two metres.

 

All of this provides further evidence that the deposit appears to be very amenable to low cost, heap leachable processing of open-pittable bulk tonnage ore. It also demonstrates the fact such feeder zones may bolster Lindero’s mineral inventory above 2 million ounces.

 

The upcoming resource estimate will also demonstrate how far the deposit has advanced since the publishing of an independent NI 43-101 compliant resource estimate in 2003 that calculated around one million ounces in the inferred category, averaging 1.08 g/t gold.

 

Moreover, the advent of a pre-feasibility study (a preliminary blueprint for a mine) within the next few months should put to rest any lingering doubts about this being a prospectively very lucrative mine-in-the-making. 

 

Key drilling highlights to date include the intersection in Hole #19 of 1.65 grams per tonne (g/t) of gold over a thickness of 274 metres. This hole also included intercepts of 74 metres grading 3.17 g/t of gold, as well as 178 metres grading 2.10 g/t of gold. These results offer a resounding testament to the homogeneous and prolific nature of ore-grade gold throughout much of the deposit.

 

Encouragingly, last year’s drilling also revealed gold in areas that were not previously believed to be mineralized, as well as demonstrating that the deposit’s barren core is much smaller than originally believed.

 

Existing Infrastructure makes Lindero’s Project Economics All the More Robust

The Lindero deposit is essentially a solitary 300-metre hill that is situated on an arid, moonscape-like valley floor. This is an ideal scenario for a heap leach mining operation; and one with virtually no discernable environmental issues. Hence, no permitting problems are anticipated.

 

The deposit also benefits from the availability of plenty of infrastructure by way of a

nearby rail line and ready access to a power line and a gas pipeline (within 125km) and water (a few km away). There is even a small airstrip nearby, as well as all-weather roads accessing the property.

 

Moreover, the Salta province’s government is becoming increasingly enthusiastic about the mine project – especially since it would prove a huge asset to the Puna district’s relatively remote and significantly under-developed economy.  

 

This all translates into a mid size gold mining operation that would be among the most inexpensive of its kind to build in all of Latin America – and with one of the lowest operating costs.

 

Before discussing the Rio Grande Project in detail, it is also worth noting that it is only 12 kilometres away from Lindero and therefore benefits from the same excellent infrastructure and the same pro-mining government. 

 

Rio Grande Deposit – The “Big Picture” Emerges

Mansfield is advancing the Rio Grande Deposit as a joint venture agreement with Antares Minerals (TSX.V: ANM). The latter is a well-financed mining company that is committed to a multi-million dollar work program and which recently vested a 50% interest in the project by making staggered cash and share payments and footing all of the expoloration costs up to US$3,375,000.  The companies will split the costs 50/50 thereafter.

To date, the Rio Grande Property has been shown to host a cluster of about half a dozen large porphyry iron-oxide-copper-gold zones, several of which have yet to experience any significant systematic exploration. A total of around 60 holes have been drilled to date, many of which have encountered ore-grade mineralization.  

 

In terms of magnitude, the deposit boasts a prolific mineralized footprint that measures over 2.0 by 2.2 kilometres. It mostly involves a donut-shaped ring of copper-gold mineralization. Average widths of mineralized zones are impressive, ranging from 80-220 metres. At the best-explored areas to date – the Sophia, Discovery, North and Southwest zones – they include average widths of around 150 metres, averaging 0.4 g/t gold and 0.4% copper.

 

The story gets even more enticing in light of the discovery of an additional style of rich mineral-laced rock – structurally-controlled, bulk tonnage gold-copper stockworks  (veinlets) at surface and near surface. For instance, 106 metres of 0.93 g/t of gold and 0.57% copper have been outlined in a large trench that overlies the Sofia zone.

 

Such breccia-hosted “shoots” (most of which were discovered during 2007’s drilling campaign) constitute mineralized sweet spots that significantly enhance the economic odds in favour of the development of a bulk tonnage open pit deposit. Just like feeder zones, shoots are also transporters for what is typically rich mineralization that is injected into the overlying vein or stockworks systems.

 

Moreover, the presence of variably oxidized mineralization (up to 250m at depth) within  the deposit makes the prospect of an inexpensive heap leach mining operation all the more viable.

 

Additionally, the encountering of 158 metres of 0.51 g/t gold and 0.46% copper as deep as 325 metres has confirmed that meaningful mineralization also continues to at considerable depth throughout much of the porphyrytic ring structure.  Exactly how deep it runs has yet to be determined.

 

On this last note, one recent key development involves the discovery of mineralization at around the 500-metre mark below the deposit’s barren core. This all further reinforces the viewpoint that Rio Grande has plenty of scope for meaningful expansion at depth. However, a lot more deep holes are needed to test the potential of the deep-seated mineralization. 

 

A Monster Deposit Could Compare to its Regional Rivals

Of further significance, the still-emerging geological footprint of the Rio Grande Deposit already covers an area four times the size of Bajo de Alumbrera – with which it shares many geological similarities. And Rio Grande is also still open at depth and internally.

 

Notably, the 545-million-tonne Bajo de Alumbrera porphyry copper-gold mine is the largest of its kind in Argentina. Located approximately 300 kilometres to the south of Rio Grande, Bajo de Alumbrera is also seated along a similar northwest-trending regional fault line.

 

Hence, Mansfield’s management believes that a deposit of between 500 million tonnes and one billion tonnes is well within the realm of possibility. And continued drilling is expected to advance this scenario inexorably towards a probable status.

 

Value-oriented investors will also take heart from the fact that the excavation of rich, bulk tonnage ore (much of which is stockworks-style near-surface mineralization) typically offers tremendous cost savings. Especially when comparing an open pit (quarry-like operation) to underground mining activities.

 

Furthermore, the ready availability of prolific tonnage invariably leads to meaningful economies of scale. This represents yet another significant cost-cutting dynamic that further contributes to making the project economics increasingly favourable.

 

Aggressively Drill-Defining Rio Grande’s Mineral Wealth in 2008

Drilling to date has variably tested less than half of the main ring structure and has barely touched upon the central porphyry intrusive at depth. Hence, 2008 will be an especially busy year for drilling, with up to 50,000 metres anticipated.

 

Three rigs will be used for definition drilling in the Sophia, North, No. 7 and Discovery zones -- which entails the contiguous eastern quadrant of the ring structure.

All told, approximately 250 million tonnes, containing three million ounces of gold and two billion pounds of copper potential, have been initially targeted in the adjoining Sophia and Discovery zones. 

 

This is where drilling is also expected to establish the consistency of grades averaging 0.5 g/t gold and 0.5% copper over 50-100 metre spacing. To obtain the threshold 0.5/0.5 number for overall average, the high grade feeders will be required to add additional volume.

 

Early signs of encouragement include one feeder system that was encountered by Hole RGA-07-034 in the Sophia zone. This is where 189 metres of 0.67 g/t gold and 0.7% copper were intersected. It included higher-grade intervals of up to 12 metres of 2.2% copper and 1.85 g/t of gold.  A number of other sweet spots  have also returned results of higher than average grade (see hole 56). 

 

Investment Summary

During the last several years, the Company’s two emerging high-impact exploration/development projects have gone from strength to strength, building considerable intrinsic value via the drill bit into Mansfield’s buoyant share price.

 

Indeed, Lindero is well on its way to becoming north western Argentina's first heap leach gold mine – one that also promises to be a model of cost-efficiency. So this project constitutes a very tangible asset that provides a solid underpinning of the Company’s somewhat undervalued, yet buoyant share price.

 

Furthermore, the advanced-stage gold-copper Rio Grande deposit is now exhibiting excellent “blue sky” potential to become a second mine in-the-making. And one of a prospectively world-class order of magnitude. Rio Grande is therefore analogous to a share purchase warrant, which is always a very appealing enticement for smart investors.

 

These twin turbo-charged value drivers give Mansfield the kind of horsepower that is an extreme rarity among North America’s legions of low capitalized mineral exploration and

development companies.

 

This reality is underscored by the fact that the Company also has a powerful war chest of about $13 million in cash-on-hand and around an equal amount in liquid investments, including a 9.8% stake in Antares Minerals.

 

The Company’s rare talent for striking paydirt in “elephant country” is also a testament to its exceptional management team. One that is headed up by brothers Gordon and John Leask, who are both seasoned and savvy exploration geologists.

 

Hence, SmallCapMedia considers Mansfield an exceptional investment situation that benefits from a number of synergistic value drivers. Accordingly, we firmly believe that there will be plenty of drill-bit-driven positive news flow in the near-term to fuel the trajectory of Mansfield’s stock. Within a few short months, this should all culminate in the publication of a much-anticipated pre-feasibility study.

 

All of this reinforces SmallCapMedia’s decision to make the Company our premier gold stock selection for 2008, while also regarding Mansfield Minerals as a sure-fire “homerun” investment prospect as it ripens into a compelling takeover target.