Jun. 30, 2010 (Baystreet.ca) --
Mining MarketWatch Journal has published a Special Growth and Valuation Advisory on Metanor Resources Inc. (TSX VENTURE: MTO) (Pink Sheets: MEAOF) (Frankfurt: M3R). The report offers insight and opportunity afforded investors as Metanor, a unique exploration junior with well over $30,000,000 of gold poured to date from their 1200 TPD mill, is expected to release a new NI 43-101 compliant resource estimate on its Barry gold project within days. The report also chronicles developments as Metanor progresses with plans to go underground at Bachelor Lake (expected to come online later in 2010).
The full report may be found at http://miningmarketwatch.net/mto.htm online.
Excerpts:
A new resource estimate is imminent on Metanor Resources’ (TSX-V: MTO) 100% owned Barry deposit, which possesses the potential for significant growth as speculated by mining expert Jay Taylor who has visited the property this year and has made MTO.V one of his top gold mining sector investment selections. Metanor could conceivably be positioned to move from a projected 60,000 - 70,000 ounces gold production per annum once the Bachelor Lake underground mine comes online (expected later in 2010) to mid-tier producer status on a second front at the Barry mine.
The Barry Deposit has morphed over the year and now represents a major asset for the Company:
The Barry deposit, located ~65km southeast of the Bachelor Lake Mine/Mill, has morphed over the year from being an interim source of ore (until the Bachelor Lake underground comes online) into what is now being described in some geological circles as a new world class mining camp. Since acquiring the Barry deposit Metanor has extracted what resource was originally thought to be there when they bought the property and have added significantly but not quantified it until now. The imminent Barry resource estimate report is expected within days.
There are two zones at Barry going down to 400m, it is a 1 km strike zone and is open at depth. Metanor has recently completed a 20,000m drill campaign on Barry and has encountered quality intercepts (i.e. 9.24g/t gold over 33m, 6.12g/t over 37.8m). The image (seen in report) shows numerous drill holes to ~100m, however the drill intercepts at 400m - 450m are very telling as it is important to remember that area miners such as Aur Resources (now Teck Cominco), Agnico-Eagle and Sigma are currently mining at depths of between 5,000 and 8,000 feet – the Barry deposit has the potential, like the gold grade at their Bachelor Lake property, to increases at depth and the strike is open in directions. It is very common in this region for the grades to increase at depth and with the values Barry is intersecting near surface, it is clear the Barry open pit deposit too will be a significant long term supply of ore for the company.
Consider the following valuation and growth points and that fact that MTO.V only has 128,450,005 shares outstanding and no long term debt:
Balance Sheet/Book value: Metanor has infrastructure valued at $150M including a proven, fully functional, permitted 1200TPD gold mill operating with ~95% rates (over 30,000 ounces gold has been poured to date). We note that Metanor’s market cap is currently at ~2/3 the replacement value of the infrastructure alone, ignoring the 1Moz+ resource; the known gold resources between the 100% owned Barry Deposit and Bachelor Lake of over 470,000 oz [this will increase with the imminent 43-101 report on Barry expected within days], plus there is over 100,000 oz historic at the 100% owned Hewfran extension (attached to the Bachelor Lake Underground and adjacent to their 70% owned Nelligan project), and ~450,000 oz at the 100% owned Dubuisson property.
Growth Potential in Revenue A => B => C:
A) Interim Period (pouring gold now):
Metanor has been upgrading the Bachelor Lake mill while pouring (interim Barry deposit sourced) gold along in progress. The Bachelor Lake mill was designed for the high grade underground ore -- the ore body should dictate the design of the equipment (the equipment should never dictate how to mine the ore body), thus it stands to reason Metanor will now concentrate on shifting from Barry to mining the Bachelor underground. Because the Barry deposit had morphed over the last year into what now appears as conceivably a major long term second front for the Company, money was diverted over the last year from Bachelor Lake underground development to define the structure at Barry, build ounces, and demonstrate the blue sky potential. The best course of action that will maximize profit potential is to wean off mining (and trucking from) Barry and step up the exploration there to affirm the potential that conceivably would see the Barry open pit systematically mined with a concentrator on site.
Note: In this interim period we DO NOT say 'production' of gold from Barry sourced ore as even though Metanor has the assets and ability to pour gold, and are pouring gold (see related June 3, 2010 release entitled 'Metanor Pours Record 747 & 744 oz Gold Bars'), Metanor is not even allowed to give statistics unless they have performed a feasibility study on Barry which is where the ore is currently coming from. Its pointless to attempt to interpret metrics anyways during this interim period as there is so much refurbishment, upgrade, drilling and employment of tax incentives/flow through dollars. From a taxation, mining, and environmental perspective Metanor is in production, but the Quebec securities commission restricts the use of the word until a 43-101 & feasibility study are supplied.
B) Bachelor Underground (60K-70K oz gold/annum):
Although Metanor diverted money from Bachelor Lake underground to Barry (which set back the time frame a bit) they still worked on the underground; the hoist was installed, the hoist room was redone, and the shaft was realigned. Being a small company without the resources to do everything Metanor has tried to be judicious in its allocation of capital and has been able to supplement matters with cash flow from the gold pouring. The goal is to bring the high grade ore from the Bachelor Lake underground online, this is expected to be accomplished by the end of 2010 - at that point the mill should comfortably generate 60,000oz per annum at a cash cost of under US$500.
C) Two Locations (possible mid-tier status within 3 - 4 years):
The premise is that eventually Barry will become self sufficient as every additional hole adds to the structure and will justify a concentrator or mill of its own through a bankable (non dilutive, amortized debt) feasibility study with capital costs aided by positive cash flow from Bachelor underground -- this scenario would see Metanor become a potential 150,000 - 200,000 ounce per year producer having two mills.
Growth Potential in Resources: Both the Bachelor Lake and Barry deposits are open at depth and along strike. Metanor is targeting over 1M ounces at Bachelor Lake and Barry appears to have the potential for 3-5M oz -- the upcoming resource estimate at Barry is basically calculated at 100m depth, however it is clearly open at depth, they have intercepts at 450m down, it runs more than 1km in length located in the center of a 15km long property, a Diagnos study pegs the current 1km strike at Barry as potentially 4km, and Metanor has documented over 64 anomalies outside the pit on the property.
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. The term special situation advisory and/or investment advisory refers to the fact the reader is being advised there is a publication on an item that is also an investment, and not advice to buy or sell. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure located at the above referenced URL.
Contact Information:
Joseph Williams, Managing Editor
Mining MarketWatch Journal
editor@miningmarketwatch.net
