Metanor Resources Inc. (TSX-V: MTO) (Pink Sheets: MEAOF) (Frankfurt: M3R) is the subject of a Mining MarketWatch Journal Review offering insight and opportunity afforded investors. MTO.V has had two news releases of significance over the last week; 1) MTO anticipates operating cash flow positive at Bachelor Gold mine and mill, and 2) Gold intercepts of 29.63 g/T over 4.42M, 14.79 g/T over 14.02M and 19.19 g/T over 8.48M. The high grade intercepts announced this week came from drilling of the lateral extensions of the veins on level 13. These results affirm the resource growth prospects at Bachelor. Metanor has identified zones which should lead to resource growth and extension of mine life many speculate closer to 10+ years; an Industrial Alliance analyst calculated (non 43-101) 700,000 oz achievable based on deep hole intercepts and extrapolation of data.
 
The full Mining Journal review may be found at http://miningmarketwatch.net/mto.htm online.
 
Metanor is now entering continual steady-state gold production and in the process will successfully attain cash flow positive operational status at its newly refurbished 1200TPD capacity Bachelor Mine & Mill, in Quebec, MTO does not deserve to be on the deep-discount rack anymore. This news positions MTO as an improved quality of equity that will attract a larger audience for its shares and should translate to a rise in share price as the reality of its accomplishments are appreciated.
 
Metanor is now in accelerated ramp-up mode after having successfully completed the bulk sample of its high-grade Bachelor ore which it began last year. The initial ramp-up period for new mines is typically a fluctuating-volume tweaking process; Metanor produced 1,718 ounces of gold in December bringing the total production since the end of July to 7,876 ounces of gold. The ounces produced in December came from working stopes and development ore. The ounces came from 8,534 tons of ore grading 6.47 g/t and the mill is consistently operating at 96-97% recoveries. We anticipate Metanor to produce well in excess of 2000 oz Gold this February via continual steady-state milling and in the process attain cash flow positive operational status. The now ongoing ramp-up toward Metanor's targeted 5000 oz Gold per month (60,000 oz per annum) run rate is expected to be accomplished this 2013 utilizing 2/3 capacity.
 
MTO is leveraged to the price of gold, able to sell 80% of its Bachelor Mine sourced gold at spot prices with the balance sold to Sandstorm as per gold participation agreement. Fully permitted, fully capitalized, and sufficiently staffed with professional mining personnel able to handle the ramp-up, MTO presents investors with an exceptional opportunity as the first new gold miner in Quebec's Plan Nord. Operational highlights of this new low cost gold producer include;
- Low geopolitical risk.
- Low hydro-electric costs, not affected by oil prices.
- Targeting 60,000 oz per year production at 800TPD, >96% recoveries.
- Estimated cash cost of ~US$464/oz gold (2011 pre-feasibility by Stantec).
- Identified zones should lead to resource growth and extension of mine life closer to 10+ years; Industrial Alliance analyst calculated (non 43-101) 700,000 oz achievable based on deep hole intercepts and extrapolation of data.
 
Metanor's infrastructure is valued (estimated replacement value) at ~CDN$200M. The intrinsic value of Metanor’s known resources (~1.6M oz gold in all categories on all its properties) and infrastructure are several times the company’s current market capitalization. With MTO now entering steady-state gold production and cash flow positive status, this should result in improved market awareness and appreciation for the Company; the reality of the infrastructure and resource value, cash flow growth, and clear ability to add ounces should translate to share price appreciation.
 
Metanor's other project of significance is its 100% owned Barry gold project located ~65 km from the Bachelor mill. The Barry property resource estimate now sits at 309,500 oz Gold of Indicated Resources (7,701,000 t at 1.25 g/t Au) and 471,950 oz gold of Inferred Resources (10,411,000 t at 1.41 g/t Au) and is wide open for large resource growth expansion. The current 1km strike at Barry is potentially 13km; there are in excess of 150 anomalies outside the pit area. Metanor has found the gold system at Barry and only needs to now track it. The Barry deposit is a 10M+ ounce target; the independent international professional geological firm SGS Geostat has identified Metanor’s Barry deposit as comparable in potential to rival other multi-million ounce deposits such as Osisko's Malartic gold deposit & Detour Gold's Detour deposit.
 
Sprott Asset Management has taken an equity position in MTO and for good reason; with two projects of significance that together many believe will take Metanor Resources to near mid-tier producer status (between 150,000 oz - 200,000 oz Gold per annum) within a few years years, the time to pay attention is now while MTO is trading at a fraction of its infrastructure value (close to book value) and closing in on its gold production target. MTO has $17 million in long-term debt ($7M from the government and $10M on a convertible debenture with a buyback provision) at very manageable terms -- it appears with MTO now entering 'cash flow positive' operational status, as long as all continues to go well, MTO will likely not require further financing to facilitate development of Bachelor going forward. The progressively larger initial free cash flow anticipated will go towards investments in expansion and growth. With anticipated strong cash flow growth, large organic resource growth potential, and sitting geographically as the only mill located within 200 km in a gold rich district, MTO with ~237.7M shares outstanding (~268.9M fully diluted; we note most warrants are deep out-of-the-money and will expire unexercised, MTO has employed excellent dilution control over the last year) provides an ideal vehicle for investors seeking exposure to precious metals.
 
The full Mining Journal review may be found at http://miningmarketwatch.net/mto.htm online.
 
This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. "*" refers to 'in all categories'; see Table 1 in the March 8, 2012 release from subject Company regarding a break down of the categories. This is a journalistic article and the author is not a registered securities advisor, and opinions expressed should not be considered as investment advice to buy or sell securities, but rather journalistic opinion only. Technical mining terms used by the writer may be used/expressed in simplified layman terms and should not be relied upon as appropriate for making investment decisions unless the reader seeks independent qualified verification. Readers are referred to the terms of use, disclaimer and disclosure sections located at the above referenced URL.
 

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James O'Rourke, Associate Editor

Mining MarketWatch Journal

editor@miningmarketwatch.net