subject of a review by Robert Gibbens of The Montreal Gazette as Metanor has
been steadily increasing Gold production at its newly refurbished 1200TPD
capacity Bachelor Mine & Mill, in Quebec. Earlier this month Metanor announced
it produced 3,017 oz Gold in February 2013, a ~35% increase in production over
ounces poured in January, and January was a 30% increase over December's ounces
poured -- all part of an ongoing ramp-up toward its target of ~5,000 oz Gold per
month run rate utilizing 2/3 capacity.
The full Gazette review is available at the following URL
online. The Gazette quotes Ron Perry, Metanor’s V.P. and treasurer; "Bachelor
Lake will become a key low-cost player in a lesser-known region of northwestern
Quebec with strong growth prospects,” … “We’ve been producing gold since last
summer, fully permitted, with a tough and experienced team of 220, a mill with
spare capacity, a mine open at depth, other properties to explore fully and a
pact with the Crees and other native groups.” The Gazette notes, among many
other insightful points, that Metanor’s longer-term ambition is to lengthen the
mine life significantly and bring its Barry open-pit property nearer Val d’Or
back into production.
With a current market cap of ~$50 million, Metanor represents exceptional value
for investors establishing a long position now. 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.
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 5000 oz per month production at 800TPD, >96% recoveries.
- grades upwards of 26 g/t gold with an average grade of 7.38 g/t gold (fully
diluted using long hole).
- 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 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. 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.
For additional insight on Metanor Resources Inc. the following research links
have been identified:
Company website: http://metanor.ca
Mining Journal article:
Q1 2013 analyst research report:
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
located at the above referenced URL.
Simon Levingston, Managing Director
Market Equities Research Group