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
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
- 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
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
sections located at the above referenced URL.
James O'Rourke, Associate
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