|
Figure 1.
Barry Open Pit - Exploration
Potential at Depth
Image shows drill holes with two zones going
down to 400m. |
Metanor Resource Inc. (TSX-V: MTO) (Pink Sheets: MEAOF) (Frankfurt: M3R) 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 right diagram (Figure 1.) 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. |
|
Figure
2. Barry Open Pit
This
image shows how the east pit meets the west pit. The Barry
Deposit is growing width wise and length wise. |
|
 Figure 3.
(Image to Left) Barry Open Pit - 1 km Strike Length
Metanor has had very good intercepts of late at the Barry
deposit including 13.31 g/t Au over 5.2m (see
Oct. 20, 2009
release),
9.24 g/t Au over 33m (see
Sept. 24, 2009
release), 7.71 g/t Au over
7.75m (see
Sept. 3, 2009 release), and 10.4 g/t Au over 7.65m
(see
June 11, 2009 release) among others. -- these results
affirm the continuing expansion and long term viability of the
deposit.
Intercepts of significance:
|
Drill Hole |
Core Length (m) |
Gold g/t |
|
BARRY (open pit) |
|
MB-09-385 |
30.15 |
3.04 |
|
Incl. |
7.65 |
10.4 |
|
MB-09-409 |
7.75 |
7.71 |
|
MB-09-423 |
33 |
9.24 |
|
Incl. |
22.5 |
13.38 |
|
MB-09-410 |
12 |
5.53 |
|
Incl. |
5.2 |
13.31 |
|
MB-09-412 |
9.9 |
3.53 |
|
Incl. |
3.2 |
10.2 |
|
MB 09-459 |
12.6 |
3 |
|
NELLIGAN (6km from Bachelor Lake Mine) |
|
NE-09-02 |
4.54 |
28.06 (Uncut) |
|
|
Figure 4. Barry Open Pit - Further Potential
|
|
Figure 1.
Bachelor Lake Gold Mill
Currently in production at 800t/d with upgrade
to 1200t/d planned in short order.
Figure 2.
Ball Room at
Bachelor Lake Mill |
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.
|
Shares
outstanding (as of December 12, 2009): 118,405,005 shares; Note: the current market cap
of MTO.V is less than half the replacement value of
their infrastructure alone. ##
|
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