Gold & Base Metal Stock Picks For 2003

Partners With The "Midas Touch" See Luster In Mansfield Minerals' Argentinean Discoveries

Marc Davis, Managing Editor

Mansfield Minerals Inc. (TSX.V-MDR) is a Canadian junior exploration company that is focused on identifying and advancing highly prospective gold properties in northwestern Argentina. For nearly a decade, Mansfield has been well established in this largely untapped gold-mineralized region. Now the involvement of high-profile joint venture partners is proving to be a very rewarding payback.

Indeed, the company's relocation to Argentina has proved to be a strategically advantageous move. It happened at a time in the early 90s when prohibitive Canadian mining laws prompted mining companies to look overseas for better opportunities. Mansfield's management chose northwestern Argentina as its geology closely resembles that of the Great Basin in the western United States. The Great Basin encompasses Nevada, the world's third most prolific gold territory.

In fact, Mansfield was among the very first North American mining companies to establish themselves in Argentina. This "first wave" came right after the implementation of mining legislation that has become progressively more mining-friendly in recent years. Prior to 1994, Argentina was a politically problematic mining jurisdiction to work in - which dissuaded foreign investment. The timing proved very opportune for Mansfield as Argentina is a mineral-rich nation with very little mining history. Hence, expansive, prime prospective territories, particularly in the nation's northwest, had remained virtually unexplored.

Canada's loss also proved to be Argentina's gain. During the mining slump of the late 90s, Mansfield clearly demonstrated that it is no "fair weather friend." While other mining companies packed their bags and returned to North America, Mansfield remained committed to its work programs. This allowed the company to forge especially close ties with local government bodies in the economically under-developed northwestern region. Thus, having acquired and explored several excellent gold and copper prospects, while also establishing itself as a solid local fixture, Mansfield set about building near-term value into its share price.

This initiative involved advancing its properties, while leveraging its risk/reward ratio via joint ventures with other well-financed mining companies. That's where global mining powerhouse Rio Tinto Mining and Exploration Ltd. and the extremely successful mine finding Lundin group come into the picture. These two deep-pocketed parties are partnered on two of Mansfield's top-tier properties. This allows for the advancement of these projects without depleting Mansfield's treasury.

On that note, the jewel in the crown of Mansfield's portfolio of discoveries is the Rio Grande Project. In January 2003, this property was given a strong endorsement by way of Tenke Mining Corp. signing on as a joint venture partner. Tenke Mining is managed by the celebrated Lundin family. They have has been instrumental in the discovery of a number of world-class mineral and oil discoveries, including the giant headline-grabbing North Field offshore oil field in the Middle East. More significantly, they have a very impressive track record for major discoveries in Argentina. This includes the immense 12-million-ounce Veladero gold deposit and the 545-million-tonne Bajo de la Alumbrera copper-gold mine - the nation's largest mine.

Now the Lundins have high hopes for the Rio Grande gold-copper discovery. This expansive mineralized system covers an area in excess of two square kilometers (1.25 square miles). In 2002, a U.S. $650,000 (Can. $1million) exploration program consisting of extensive trenching, detailed geophysics and an 11-hole reconnaissance drill program outlined a clear "footprint" for this large iron oxide gold-copper system. The work program (which was paid for by a previous joint venture partner) also indicated that substantial extensions to the known mineralization remain to be drill tested along strike. Moreover, a preliminarily 3-D geological model of the discovery zone suggests the presence of deep, high-grade gold and copper values. At this juncture, the property has demonstrated the potential to host up to 500 million tonnes of gold-copper ore, which is amenable to a low-cost, bulk mineable operation. This scenario is particularly inspiring to both Mansfield and the Lundin group.

"The size of the system, the widespread mineralization, hints of higher grade mineralization at depth and the location in a newly discovered porphyry district give Rio Grande all the right markings of a potentially world-class project - the type of large project we like to pursue," says Lukas Lundin, Chairman of Tenke Mining.

Other deposits that resemble the Rio Grande model include Phelps Dodge's 366-million-tonne similarly mineralized Candelaria deposit in neighboring Chile, as well as Western Mining's 560-million-tonne copper-gold-silver Olympic Dam deposit in Australia.

Tenke has an option to acquire a 65 per cent interest in the Rio Grande project by way of spending U.S. $5.4 million (Can. $8.1 million) over five years. Notably, as the operator, Tenke intends to develop this property under the direction and management of Patricio Jones PhD and Ricardo Martinez MSc. These two accomplished geologists were instrumental in the discovery of Argentina's huge 12-million-ounce Veladero gold deposit.

Another key project that also has "blue sky" potential is the Arizaro-Lindero Property. It is a wholly owned porphyry gold property that has attracted the investment dollars and geological expertise of the world's second largest mining company, Rio Tinto Mining and Exploration Ltd. This global powerhouse has an option to earn a 60 per cent interest in this project by spending close to U.S. $4 million (Can. $5.9 million) and by making option payments totaling U.S. $770,000 (Can. $1.1 million) over five years. An additional 10 per cent interest may be earned by way of completing a multi-million dollar feasibility study on the property.

As the name suggests, the Arizaro-Lindero project consists of two closely separated mineralized zones. Notably, they are seated along the same regional structural trend as the Rio Grande deposit. Of the two, however, the Lindero prospect shows the most promise to date with mineralization that compares favorably to Mansfield's flagship Rio Grande Property. Last year, Rio Tinto conducted a 10-hole drill program (focused mainly on the Lindero prospect) to test the potential of these two gold-copper zones. At the Lindero prospect, impressive intervals of significant mineralization have prompted Rio Tinto to conduct a "reverse economic study" on the property. This includes 3-D modeling with a view to making a preliminary determination of the project's economic viability. This move is an encouraging early indication of the potential for a mineable ore body that could host up to three million ounces of gold.

Rounding out Mansfield's best prospects in Argentina is the Aguas Calientes Property. This wholly owned epithermal gold-silver property is also in the same mining camp as the Rio Grande and Mansfield's other premier prospect, the Arizora-Lindero Property. They are all situated in a region with good infrastructure, near the city of Salta. Drilling on the Aguas Calientes Property, which totaled 1,500 meters (4,900 feet) over 13 holes, intersected a strike length of gold-silver mineralization at surface that is at least a kilometer (0.6 miles) long. Moreover, further step-out drilling suggests that this mineralized prospect has untested potential to extend for several kilometers to the boundary of another discovery zone. The company is seeking a joint venture partner to further explore this project.

Finally, Mansfield hasn't completely given up on Canada. With the advent of British Columbia's latest government enacting mining-friendly legislation, mining companies are slowly but surely being lured back. Accordingly, Mansfield has one wholly owned property in British Columbia, the Fireweed deposit, that was mothballed until this recent improvement in B.C.'s political climate. This silver-zinc-lead discovery hosts a main mineralized zone that extends five kilometers (three miles) along strike length. About U.S. $1.1 million (Can. $1.6 million) has been spent in recent years on extensively exploring this property, including 19,800 meters (65,000 feet) of diamond drilling. Current reserves consist of 900,000 tons grading 9-oz/ton (280 g/tonne) silver, 2.9% zinc and 1.5% lead. There exists considerable scope for increasing this resource base as several zones within the property remain untested at depth and along strike. The company is seeking a joint venture partner to further advance this project.

On the corporate front, Mansfield benefits from a strong management team. It includes brothers Gordon Leask and John Leask, who together have close to half a century's worth of experience in the mining business. Moreover, Gordon Leask has presided over the company for over a decade, during which time he demonstrated an unwavering commitment to developing top-tier projects in one of the world's last under-explored mineral belts. The accomplishments of the Leask brothers in this regard, along with their solid reputations, have allowed them to more than adequately finance Mansfield even during the tough times of the late 90s. Currently, the company has close to U.S. $1.6 million (Can. $2.5 million) in the treasury.

The Leasks are also joined by Dr. Murray Hitzman, a director and technical advisor, whose distinguished career includes serving as an advisor to the White House Office of Science and Technology Policy in Washington. As an exploration geologist, Dr. Hitzman also played a leading role in the discovery of the Lisheen zinc-lead-silver deposit in Ireland. He was awarded the Chevron Corporation Chairman's Award for his contribution to this significant discovery.

In closing, Mansfield's joint ventures with high-profile partners that have deep pockets and enviable technical expertise offer the company considerable "home run" potential in Argentina. Indeed, this gives Mansfield's investors considerable leveraged exposure to at least two potentially world class mineral deposits. Moreover, the company's seasoned management team has built up a very strong treasury, thereby precluding the need to dilute the company's stock with additional financings any time soon. All things considered, SmallCapMedia believes that the company's share price is particularly undervalued in terms of its fundamental picture. However, the prospect of a busy 2003 drill season will likely deliver encouraging news flow to build more value into Mansfield's share price.