New York, NY (PRWEB) December 14, 2009
Market Equities Research Group has published a market bulletin on Metanor Resources Inc. (TSX VENTURE: MTO) (US Listing: MEAOF) (Frankfurt: M3R). The market bulletin offers analysis of resource growth prospects at Metanor's Barry deposit and also offers forward discounted valuation metrics.
The full Market Bulletin may be seen at http://marketequitiesresearch.com/report1209mto.htm online.
Metanor Resource Inc. is a new gold miner in the process of upgrading to full capacity status while generating cash flow, pouring gold in the interim. The Company affirms it is on schedule to have the infrastructure upgrades complete by the end of Q2 2010. Production wise the pieces are falling into place and will be evident as the 2010-11e forecasts are validated, the other key ingredient of resource expansion is being addressed too and is the focus of our market bulletin below.
Metanor has a high grade resource with very large expansion potential at the Bachelor Lake/Hewfran underground, however the exciting and rapidly developing story is what it occurring at the Barry deposit.
Analysis of Resource Growth Prospects at Barry Deposit:
Metanor now undertaking a 20,000m drilling campaign at Barry targeting a potential 1M+ ounce resource...
Metanor's 100% owned open pit Barry deposit has been the sole source of ore extracted to date during this interim period. The Barry open pit is located approximately 65 km southeast of the Bachelor Lake Mine/Mill and will no longer simply be an interim source until the high grade underground source at Bachelor Lake is operational. This fall (2009) Metanor launched a 20,000m drilling campaign targeting a significant resource.
The Barry deposit was originally purchased with the understanding at the time to have a certain economic body, however Metanor has already extracted close to what was originally thought. Metanor soon discovered the original interpretation suffered from a lack of information and the exploration Metanor has performed since acquiring the property now indicates the mineralization is much greater, and as continued incremental exploration/drilling information accumulates it is becoming apparent Barry is developing into a major asset for Metanor.
The top diagram (Figure 1. in above URL) illustrates the significance of what is developing. There are two zones at Barry going down to 400m, it is a 1 km strike zone and is open at depth. The image shows numerous drill holes to ~100m, however the drill intercepts at 400m 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 is likely a significant long term supply of ore for the company.
Market Equities Research recalls when Agnico-Eagle first first discovered the Goldex mine in this region, it started off looking similar to how the Barry deposit is now. If memory serves well, originally the Goldex deposit was small (starting below surface) pegged at around 12 million tonnes -- looking at the diagram above of Barry the author can see the strike zone and correlating with the intercepts to date the current potential of Barry is bigger plus Barry starts at surface, whereas Goldex starts over 1,000 feet down. The story here is what was discovered with exploration at depth and how much that small Goldex find grew; the Agnico-Eagle Goldex mine and plant reached commercial production in August 2008, becoming Agnico-Eagle's second mine to open in the Abitibi region of northwest Quebec - it now has reserves of almost 1.6 million ounces of gold and growing.
Forward Discounted Valuation Metrics:
Forward discounted valuation metrics for Metanor Resources as an investment vehicle are predicated on Company forecasts for upgrades completed. As of mid-2010...
- Bachelor Lake underground ore is expected to be online and the mill will be processing ore at 1200 t/d. The actual upgrade to 1200 t/d is expected to be sooner.
- Projected production for 2010-11e = 60,000 ounces gold and cash costs are expected to drop under $500/oz once upgrades are complete.
- Bachelor Lake and Hewfran mines will be mined, augmenting the mill feed from Barry.
Market Equities Research's sentiment on the forward projected valuation of Metanor echoes that of Howlett Research which provided a $3/share valuation based on milestones being achieved. Metanor is capitalized to accomplish its forecasted goals and now with in excess of 30,000 ounces having been poured to date proof of performance has mitigated production risk. In the process of operating the gold mill in this interim period management has developed a level of confidence to make the above projections. The risk-reward characteristics are highly advantageous for investors establishing a long position in Metanor Resources now as the Q2 2010 target dates are fast approaching and Metanor's share price should gravitate upwards according to accepted valuation metrics; production wise the pieces are falling into place and will be evident to the investment community as the 2010-11e forecasts are validated.