New York, NY (PRWEB) February 13, 2009
Precious Metals Review has published an updated special situation advisory on Metanor Resources Inc. (TSX-V:MTO)(Pink Sheets:MEAOF). The advisory provides insight into the opportunity afforded investors as Metanor is now in its fifth month of official commercial gold production at Metanor's 1,200TPD (upgradeable capacity) Bachelor Lake Gold Mill.
Since Precious Metals Review published its original advisory last week Metanor has released news "New Discovery Confirmed". The results indicate that the mineralized Hewfran West zone, directly adjacent to Metanor's 100% owned Bachelor Lake Gold Mill and Mine, is continuous from surface to 180m elevation below surface where resources were evaluated in 2005. Hewfran and the Bachelor Lake Mine are connected underground. Bachelor Lake Mine's 6th and 8th gallery are part of Hewfran and these new results indicate economic grade potential for mining via surface open pit or decline type mine on the extension. It is also important to note that the current depth of the shaft at the Bachelor Lake Gold Mine is currently only 1,700 feet with very large expansion potential; the two main veins at the Bachelor Lake Gold Mine run parallel and are 75 feet apart at an 80 degree angle. Metanor expects to drop the shaft further as the project progresses and the potential is in place to identify 1.5 million ounces going forward. 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 gold grade at the Bachelor Lake property increases at depth and the strike is open in all directions at the 2,300 foot mark.
The Precious Metals Review also provides a gold price forecast synopsis of USD$1500 by analyst.
The full review/valuation synopsis with chart may be seen at http://www.SectorNewswire.com/PMRmtoFEB09r.pdf online.
Metanor Resources Inc. (TSX-V: MTO) is an unhedged gold producer in mining friendly Quebec. Metanor at its 100% owned 1,200 (upgradeable capacity) TPD mill in Desmaraisville (Val d'Or) is now a full fledged commercial producer as of October 1, 2008. Production in 2008/09 should conservatively come in at 25K - 35K oz gold and ramp up from there to 55K - 65k oz in 2009/10. Ore extract is coming from their 100% open pit operation on their Barry gold deposit (located approximately 65 km southeast of the mill).
Forward Looking: Metanor Resources plans to complete refurbishment of the Bachelor Lake Mine shaft and headframe, upgrade to 1200TPD and begin also mining gallery 6 and 8 at the Bachelor Mine … at an average grade of ~7g/t (mixed with Barry deposit) accepted valuation metrics on a forward discounted bases of revenue generated places the share price of MTO.V at several times what it is currently trading at now. A qualified research analyst that prepared an estimate of Metanor's share price valuation in 2008 derived a similar opinion based on comparable research. The analyst provided a valuation of $3/share which was predicated on management executing on their plan and achieving certain milestones - which are apparently being met, hence MTO.V current share price now appears extremely undervalued.
Valuation Analysis/Commentary: "The current market cap of MTO.V is less than 30% the replacement value (~CDN$140M) of their infrastructure alone, ignoring the 1M+ oz gold resource, with ever expanding & further significant exploration potential, with substantial revenue projections. Mining expert Jay Taylor, has made MTO.V one of his top picks saying "This is a story of production, exploration, and building ounces". Metanor's mill is configured to produce dore bars of gold, with a small component of silver. MTO.V has ~1,000,000 oz of Gold (NI-43-101 measured and indicated) available from their three properties. The ongoing exploration drill program at their ever expanding Barry deposit is just one of many venues to expand the resource base and is exceeding expectations. Their forward projected EPS will likely be very significant as a debt free unhedged gold producer and the current market cap relative to expected revenues is disproportionate; with less than 79M shares outstanding and trading under CDN$0.70/share, the market cap of MTO.V relative to its resource base/production expansion plans and future revenues make MTO.V among one of the most attractive vehicles for gold investors..."
Now, with four months under its belt after dawning status as an official commercial gold producer, Metanor Resources Inc. (TSX-V: MTO) is poised for significant upside revaluation as proof of performance has mitigated production risk -- to date MTO.V has poured over 20,000oz of gold, is running at 700TPD 24/7 with recoveries of ~96%, and has near term plans to increase capacity up to 1200TPD at nominal capital expenditure. Fundamentally MTO appears exceptionally undervalued -- has virtually no long term debt, enjoys high margins with spot gold over CDN$1,150/oz (low cash costs ~CDN$475/oz), is domiciled in a stable jurisdiction, has a growing resource base, and is currently trading at a mere fraction of its 100% owned ~$140M infrastructure.
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