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Source Video:
http://www.resourceschannel.com/programplay.asp?show=FacetheAnalyst-GhislainMorinandRonaldPerry
Source Audio only:
http://progressive.playstream.com/radiofn/progressive/jtMTOinterview.mp3
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The following is
the transcript of Resource Channel interview between Jay
Taylor (Analyst and Editor of Jay Taylor’s Gold and
Technology Stocks Newsletter) and Ghislain Morin,
President & COO of Metanor Resources Inc (TSX-V: MTO)
and also with Ronald Perry, Treasurer & Director
Analyst, Jay Taylor: I’m Jay Taylor, I’m the
editor at Jay Taylor’s Gold and Technology Stocks
Newsletter and I’m here today with Ghislain (Jessie)
Morin, he’s the President and the Chief Operating
Officer of Metanor Resources and also with Ronald Perry
who is the Treasurer and a Director of the company and I
believe both these gentlemen are Directors of Metanor
Resources. I met you in Vancouver a couple of weeks ago
at the Gold Show. I was introduced to your story and
found out that you were a new producer, with some very
exciting exploration potential and you’re selling at a
pretty low price and I said “well gee”, this is the
story I need to tell my subscribers”. So, we actually
put you on as a “Buy – Recommendation” a couple of weeks
ago and it is a very exciting story, but I’m hoping that
we can share it now with our viewers so would you just
sort of give us an overview of your company, your
prospects, your objectives for the company going forward
the next year two, three years?
Ghislain Morin, President MTO: Okay, well Metanor
was formed in 2001, right here in Val d’Or, first of all
we had to raise private money - we call it “love money”;
everyone in Val d’Or became Metanor investors. We
started with the Dubuisson Property which is located
right here in downtown Val d’Or. We did 15,000 thousand
meters of diamond drilling on it and came out under the
instruments of 43-101 at 460,000 ounces, all categories
of resources – measured, indicated and inferred. What’s
nice about this property is that its located right next
to gold producer Agnico-Eagle Mines Limited (NYSE: AEM)
- they are spending a couple of a hundred million
dollars right now - we’re right next to them – down the
road we might come back to that one. But - after doing
all that work on that Dubuisson Property… we had a few
meetings and looked at what would be the cap ex on that
one - to try to put that property into production - it
was [would have been] big money and big dilution for the
company, so we looked around at what could be much more
interesting for us in terms of production - After
looking around, we found Bachelor Lake Mine which was a
good property and also infrastructure was sitting on it
already. After discussing with the past owners, we
discussed the price of it and we bought it out. And then
we did another 15,000 meters of diamond drilling
underground after pumping the shaft to be back in
operation. After that we came up with three hundred
thousand ounces underground, under 43-101 – good grades
– so we just keep going.
Analyst, Jay Taylor: So you’ll have 300,000
ounces on the Bachelor Lake Property and 450… on the
Dubuisson Property, so you’re already 750,000 ounces
between the two.
Ghislain Morin, President MTO: Yes, and on the
Bachelor Lake Property – there is another property right
beside which we call the “Hewfran Property” belonged to
AUR Resources. So
during the time that Bachelor Lake Mines was in
operation AUR Resources
did a lot of exploration on the Hewfran property using
the same underground infrastructures. They found out
like ~100,000 ounces - so we bought that one also.
Actually Bachelor Lake was only half a mine - in the
past year – buying Hewfran property right beside became
100% of a real mine. So right now the plan is to keep
diamond drilling on the ground on the Hewfran site to
increase the ounces. Then we’re going to have to sink a
shaft by a 1000ft and get the underground developed and
get that ready to go. But down the road – even having
that, it was kind of hard to raise all the money to put
it into production, because we are talking here 18-20
months work before it would be ready for production. So
we decided to look around, what could give us some early
cash-flow. – We found out the Barry Deposit belonged to
Murgor Resources - which was open-pit deposit - we
made them an offer - we put the deal all together and
then we looked at what was possible to be done doing
short runs - we started to get the metallurgy done on
that and we found out it was really ready to go – that’s
what were doing right now … right now - we started
production two weeks ago, having all the camps set on
the Barry site and also on the Bachelor Lake Site – we
refurbished the mill; we did spend close to 5.8 million
dollars into the mill and right now we’re ready to go
and so far we have over 35,000 tonnes crushed – sitting
on the Bachelor Lake site ready to feed the mill ready
– the mill is turning 24 hours a day right now and we
also have about the same amount of ore sitting at the
Barry site. What makes the Barry site very interesting -
to start with, when we bought it from Murgor, many
studies had been on it by other companies and they all
thought that it was a flat deposit. So what makes Barry
very interesting now, after doing the first blast on it
we looked at it and thought “that could not be flat” –
that’s one of the reasons why we bought it - So today
we’re sure that’s not a flat deposit – it dips 65 to 70
degrees down, not much diamond drilling has been done
under that. Right now the pit will be down 25meters and
we believe strongly that it can keep going down. Last
summer we did a lot of exploration work on it by
removing a lot of overburden around the pit, and we took
a lot of channel samples, and so far that pit is
extending sideways and on strike lines.
Ronald Perry, Treasurer, and Director MTO: It’s
a pleasant surprise - in a way that its really turning
out to be a world class - I think potentially world
class deposit – expanding along strike - open at depth
–it’s dipping at 65 degrees…
Analyst, Jay Taylor: Holes down yet? [on Barry]
Ghislain Morin, President MTO: We haven’t put
any holes down yet, but just doing some surface
exploration - now we’re quite sure where that deposit is
going.
Analyst, Jay Taylor: Okay could you get us an
idea what grades you’re …
Ghislain Morin, President MTO: Yes, when we did
our study - we did the study on 4.3 g/t with a width of
eighteen, twenty meters. Right now the pit is 50 meters
wide and the grades are ranging between 7 and 9 grams
per tonne. So it’s quite interesting - and in the
channel sampling, the ore stops in the clay - so it
means we have to remove more over burden to find out
where that thing is going.
Ronald Perry, Treasurer, and Director MTO: We
are actually 100 feet outside the pit already on channel
sampling and we’re ending in gold … we are very pleased
with this purchase.
Analyst, Jay Taylor: So are you now in production
from both properties or just…
Ghislain Morin, President MTO: No just on the
Barry Property.
Analyst, Jay Taylor: And your Barry Property is I
believe 110 Kilometers on a private road going to
Bachelor Lake.
Ronald Perry, Treasurer, and Director MTO: Being
on a private road we can haul 50 tonnes a load versus if
we’re on the provincial roads, we would probably do
under twenty five. So management was very smart in
putting a crasher on site at Barry so we take the large
stones - crush them on site so we can add smaller stones
and transport them, so we are transporting 50 tonnes.
Management always thinks on its feet; cost conscious all
the time, as Ghislain said “it a 110 kilometers,
eventually it was supposed to be 130, but we found a
horse shoe in the road so we built our own bridge and …
management had quotes of half a million dollars and they
found it and got it in for well under $150,000 - so
they’re always thinking of how to get their things on
time on budget - which is very good.
Ghislain Morin, President MTO: And so far we
really got lucky on equipment, also because we own all
the equipment for the pit.
Analyst, Jay Taylor: You own it, clear and free
now – no debts?
Ghislain Morin, President MTO: No debt at all -
we still have six million dollars in the bank - we just
finalized five million dollars equity last week. And
also, as everyone knows, I think its one of the best
places to invest in exploration in Canada. We have got
tax rebates from the Quebec government that’s great.
Analyst, Jay Taylor: You have a very pro-mining
environment [in Quebec] not only on the part of
Government but on the part of the people as well here.
Ghislain Morin, President MTO: Exactly.
Analyst, Jay Taylor: Do you have any
infrastructure issues at all? - I mean - you're in
production so obviously it is a very positive thing…
Ghislain Morin, President MTO: When we did the
first study to produce - the infrastructure that we have
on site right now – we would have to start with at least
100 million dollars – so it’s a really timing issue –
that mill is just like brand-new right now [No
infrastructure issues].
Analyst, Jay Taylor: You’re moving material about
100 kilometers I think you said?
Ghislain Morin, President MTO: Yes [110].
Analyst, Jay Taylor: And your grade is 7 to 9
grams per tonne. So I guess the economics work alright,
what is the cost per tonne?
Ghislain Morin, President MTO: Right now the
cost $310 per ounce (cash cost).
Analyst, Jay Taylor: What was the cost to
transport the material?
Ghislain Morin, President MTO: We’re paying
seventeen dollars per tonne.
Analyst, Jay Taylor: So if you have rock that’s
worth, you know – carrying a 1/3 of an ounce or
thereabout of gold – then it can work pretty good,
especially at $900 gold.
Ghislain Morin, President MTO: And in the mill -
the first study, we were supposed to have like 35 people
running that mill - and after making it automatic – we
computerized the mill actually and we are now running
that mill with 12 men instead of 35, so it brought the
cost down again.
Analyst, Jay Taylor: I’m sorry, I think I
interrupted you a minute ago, you said that your costs
are about what per ounce?
Ghislain Morin, President MTO: $310 per ounce
(cash cost),
and might go down again.
Analyst, Jay Taylor: It could go down again?
Ghislain Morin, President MTO: Yes, because we
have higher grades - you know, there’s some savings of
[with] the mill…
Analyst, Jay Taylor: And economy of scale at all?
Ghislain Morin, President MTO: Right now we are
doing 550 tonnes a day and we are working right now to
crank the mill up to 750 tonnes a day, that should be
done by the end of April/early May – this year. And by
next fall, October, the mill will run 1200 tonnes a day.
Analyst, Jay Taylor: 1200 tonnes a day?
Ghislain Morin, President MTO: Yes.
Analyst, Jay Taylor: And you have enough mill
feed to feed that?
Ghislain Morin, President MTO: Absolutely,
because Just the Barry pit - when we first bought it, we
thought we would have 18-24 months feed with that pit
and right now we are talking more five years than two
years!
Ronald Perry, Treasurer, and Director MTO: And
possibly more as we keep drilling the property.
Ghislain Morin, President MTO: It keeps going.
Analyst, Jay Taylor: A lot of times the companies
like to drill out a deposits before they start to mine
it, is there is any danger that you might mine it in a
way that would make it more difficult to get to the ore
in the future?
Ghislain Morin, President MTO: That’s one of the
reasons why we did all that surface exploration – we are
doing all those channel samples -and they give us good
ideas of what could be on the ground - Like 15, 25, 30
meters deep. And right now we have two rigs just arrived
on site, they arrived within the last two weeks, and
we’re going to start a big diamond drill program on the
Barry site in the next couple of weeks from now.
Analyst, Jay Taylor: So you could be conceivably
adding ounces – you don’t have a resource really at
Barry.
Ghislain Morin, President MTO: Oh Yes, there is
over 200,000 ounces. If we would do the
recalculation on it today, it would be double I would
say (educated guess).
Analyst, Jay Taylor: Yes, of course when you do
it, you will do it in accordance with 43-101, and then
you will report it. So you have a pretty energetic drill
program there now.
Ghislain Morin, President MTO: Yes… right now
its’ time to do between 15,000 - 20,000 meters from now
until next December.
Analyst, Jay Taylor: Relatively shallow holes…
open pit targets – So you should be able to prove up
those ounces pretty quickly I would guess if you can get
the assays back.
Ronald Perry, Treasurer, and Director MTO: We
don't have any problems - that’s a good point - for a
small company our size, management… Serge and Jessie
(Ghislain) decided to put their own lab in. We have a
half a million dollar lab; we can do atomic absorption
and fire assays. So we don't have or wait to find out
whether or where we are going to drill for the next
target, we get the instant results and we can plan -
management can react very quickly.
Analyst, Jay Taylor: Management has that internal
information, but that’s not something you’ll necessarily
go out to with the markets.
Ghislain Morin, President MTO: We have to
reconfirm them to be able to report them, but at least
it helps us to know where we’re going.
Analyst, Jay Taylor: Exactly, it allows you to
plan and know where to put the next drill hole down.
Ghislain Morin, President MTO: And I think that
is very important for us.
Analyst, Jay Taylor: I think it is very important
because – yes the time aspect, because you have to wait
for six months, a lot of times the labs are backed up
many months and you have to wait and can’t do your next
drill program until you get the information, so that’s
really important.
Ghislain Morin, President MTO: We are so happy
with it [Barry Deposit] because it was only 35-40,000
ounces. After removing all that overburden on top of it,
right now I think we do have over fifteen hundred fifty
foot lengths and it keeps going, that’s unbelievable.
Ronald Perry, Treasurer, and Director MTO: And
we went back and we purchased more property so we own
Barry-1, Barry-2, so we have a lot of land … and we also
bought the Nelligan property which we own 70% of.
Ghislain Morin, President MTO: Just the Barry
alone, it’s 6,500 acres - which is quite big.
Analyst, Jay Taylor: So your main focus right now
there is the Barry and the Bachelor Lake Properties,
that’s where you really focus, that’s where your
production is coming from. You mentioned the
Nelligan, could you
tell us a little about that?
Ghislain Morin, President MTO: Yes.
Nelligan is located 4
kilometers from the Bachelor Lake Mill and so far we can
see all the ore crop on surface. We took samples on it
so far and the grade is unbelievable. So it deserves a
good diamond drill exploration program. We will start
doing that in the springtime. We are going to remove
overburden, diamond drilling, and see what could be the
potential of it. But what made us enter on that project
is because of the location of it. Because Bachelor Lake
Mines, and in between the
Nelligan property, it use to be a base metal mine
called Coniagis Mines,
and that mine has been operation for 7 – 10 years and
they were mining high grade zinc and silver. There was
an anomaly on that property and when we look at the
anomaly on the Nelligan
property – I would say ten times bigger – never been
drilled, its virgin – so we do not know what is there,
but it is very interesting.
Analyst, Jay Taylor: It is very interesting, you
have several other properties too, those are sort of
your primary properties. You have a number of other
properties, if you’d talk very briefly about those
perhaps and what your plans are, do you plan to possibly
joint venture in some of those out to some other
companies.
Ghislain Morin, President MTO: Yes we do have
Opinaca property located not to far from Éléonore
(belongs to Goldcorp today - used to be Virginia Mines)
and located about 8 kilometers from where they are, that
one we plan to make a joint venture on that one also. We
also have the Wahnapitei Property located in Sudbury,
right near Nickel Rim South big discovery – this
property is cobalt-nickel-gold deposit and lead. So this
property deserves a good diamond drill program or it
might be a joint venture on it also.
Ronald Perry, Treasurer, and Director MTO: It’s
so close to the Nickel Rim head frame that people think
the head frame is on our property [LAUGHING] yeah.
Ghislain Morin, President MTO: But, our business
plan right now is to concentrate on Bachelor Lake [and
surrounding mining camp]. And right now - I think it’s
important to say so because that’s exactly happened with
the Barry Deposit - that was a part of our business plan
- surrounding all that mining camp, and when we look at
what has been done in the last 25 – 30 years there is a
potential of 1.5 million ounces which have been found by
small junior companies all around, and those deposits
are too small to justify to build a mill.
Analyst, Jay Taylor: On their own, they could be
mined through someone else’s mill, possibly through
yours. [Note: Metanor’s Bachelor Lake sits
geographically as the only mill located within 200 km]
Ghislain Morin, President MTO: The key of
Metanor is to buy them out one by one, after looking at
the quality of the resource. So far we did it with
Barry, we are looking at something else right now and we
trust I think it could possible to add to ounces more
than what we have right now.
Analyst, Jay Taylor: Okay well this begs the
question then, you are talking about sizing up your mill
to 1,700 tonnes a day I think?
Ghislain Morin, President MTO: 1,200. By the end
of April [2008] we’ll be 750, next fall by October –
middle of October we’ll be running 1,200 tonnes a day.
Analyst, Jay Taylor: Okay so that sort of begs
the question I’m thinking all these different deposits,
you have considerable upside potential, probably more at
your existing mine.
Ghislain Morin, President MTO: Just looking at
the Bachelor Lake Mines for example. Where we did our
diamond drill programs on the ground. We did 15,000
meters and there’s one reason why we have stop drilling
because we are missing space to keep going -the angle
was not going to be right if we were to keep going on
it. So right now we have to sink a shaft and keep the
last level for
explorations if we are to keep going on it. That
Bachelor Lake Mine has a potential for over a million
ounces – for sure.
Analyst, Jay Taylor: A potentially very deep
deposit I would imagine.
Ghislain Morin, President MTO: All deposits
around here are as deep as 5 – 6 – 7,000 feet.
Analyst, Jay Taylor: Exactly, and now you have
the capability, technically, to go very deep as
Agnico-Eagle is doing on their property. So I guess we
need to ask you a little about your management team,
could you just tell us a little bit more about
yourselves, both of you, and then maybe you could give
us an idea of the rest of your management team.
Ghislain Morin, President MTO: Well right now
the management team together has over 200 years
experience in mining, which I think is quite important
for what we are doing right now. Just myself, I’ve been
working in the mining for the last 30 years. First of
all I worked for BHP Biliton Development, I worked for
Noranda for a few years, and then I came to work to
myself - having my own company. I did almost all of the
mills around here in this area in Val d’Or; I did the Doyon Mill which
belonged in those days to Lac Minerals and Cambior and
then I started the Mill at Gearndain which was, I think…
1,800 tonnes a day mill. I put up the mill AUR Resources
which was 4,500 metric tonnes a day. I did the mill at
Breakwater Mills on the other side of Lebel de Quevillon.
And I did other jobs also in the mining industry, so I
know quite a bit about one and I worked underground as a
miner also. So I’m kind of home in that kind of trade.
Ron I can let you talk about yourself.
Ronald Perry, Treasurer, and Director MTO: Well,
myself, my background is a chartered accountant I met
Jessie and Serge Roy, the CEO, about three years ago and
was very intrigued by what they wanted to do. They
wanted to build and have a sustainable business plan and
that’s what appealed to me. So I became an investor and
then about a year ago the gentleman asked me to come on
the Board of Directors and now I’m Director as well as
Treasurer of the Company and I’m very pleased with what
management has done today because we’re building the
company with sustainable growth and they’re very cost
conscious and they are looking for cash flow and that’s
why we are going into production.
Analyst, Jay Taylor: So Jessie you are in the
operations part of the business. What about the
exploration, because you are in exploration company, not
only a production company.
Ghislain Morin, President MTO: Yes we do have a
good geologist who is the director of explorations and
he has over 35 years in explorations, who did work from
many big companies also and worked also for juniors – so
he knows very well what were are doing – that’s Andre
Tremblay - and so far when we do talk with Andre, who
is very conservative geologist , and when we look at the
Barry Deposit he says in thirty-something years of
experience it’s the first time in his life he has been
working on a project which is that good. He is very
impressed.
Analyst, Jay Taylor: So he is very excited.
Ghislain Morin, President MTO: Oh very excited.
Ronald Perry, Treasurer, and Director MTO: He
can’t wait to get the diamond drilling program going on
that.
Ghislain Morin, President MTO: The other big
issue at Metanor was the key people to operate all of
this.
Analyst, Jay Taylor: Oh exactly, there is a
shortage of people these days, so you have the mining
people in place.
Ghislain Morin, President MTO: I knew many
people who working with other mining companies around
here and one of them who was one of the directors of
them which IAMGold, Cambior in the past, he came to work
with us as a general manager and a big crew of them came
with him - so we had the main people to start to work
with.
Ronald Perry, Treasurer, and Director MTO:
Claude Imbeau is
really a seasoned professional with many years of
experience…
Ghislain Morin, President MTO: In the order of
35 – 40 year of experience in the mining industry of
underground and surface operating.
Analyst, Jay Taylor: Very important, so you had
money in the bank, you’re producing. How much do you
think you can produce? How much gold do you think you
might be able to produce?
Ghislain Morin, President MTO: We like to be low
profile on that, we don’t want to say things that won’t
happen, so right now we’re now saying to everyone were
going to do 25,000 ounces, maybe up to 35,000 ounces
[this start-up year] - and it could be better than that
but we’ll see down the road what is going to happen.
Analyst, Jay Taylor: Very good, so if we’re
looking at $300 costs, roughly $900 gold, you should
have some good positive cash flows from even 25,000
ounces that could help to build up your cash position
and any ideas, maybe some of that to buy some of these
other things - gold projects.
Ghislain Morin, President MTO: It will help us
to buy some more projects surrounding the Bachelor Lake
Mine Camp and also using a piece of that money to do
more explorations you know and we’d like to stop the
dilution.
Analyst, Jay Taylor: Sure - well you have how
many shares out now?
Ronald Perry, Treasurer, and Director MTO:
66,000,000 and change and we’re in the process of doing
5 million dollars at a dollar (Raymond James) and change
so we’ll be maybe 71 million shares.
Analyst, Jay Taylor: Share price is more or
less…?
Ronald Perry, Treasurer, and Director MTO: 98,
90 cents right now [early Feb 2008].
Analyst, Jay Taylor: So you’re about $50M market
cap right now?
Ronald Perry, Treasurer, and Director MTO: We’re
not even covering the infrastructure, which is as Jessie
said about 100 to 120 million and we have no debt.
Analyst, Jay Taylor: This is a situation - I
think you just explained why I like this story when I
heard it in Vancouver. Certainly if you’re able to go
into production and have lots of upside potential and I
think you do from what I understand about the Barry
Property especially. We have, in our newsletter, we have
companies we call “A” progress companies - those are
companies that are in production and we have then “B”
project companies which are companies which have an ore
body and some economic studies done but not yet in
production and then we have C and D companies which are
further away from production and we like to say that the
B, C and D companies we need to see a double in their
stock over the next year, over the next year, that’s
the justification for keeping them in our newsletter .
Companies that are in production, as yours are, we don’t
demand such performance and quite frankly given the
current price of your shares I think there’s a real good
chance we could see a double in your share price and I
might also add that the gold shares have been very weak,
they have not participated in this most recent move in
gold from 700 to $900. So I think you gentlemen, the
shareholders ought to be very pleased going forward. If
you are able to execute your business plan, if you can
produce 25, 35,000 ounces, really the first year you’re
in production, and do it profitably and build up cash
and I think this is a very good story. I’m very pleased
that we have it in our newsletter and I really wish you
guys all the best, is there anything else that we might
want to add before we conclude.
Ghislain Morin, President MTO: Well again, I
think this is going to be a great year for Metanor,
especially with the Barry Deposit, with that big
exploration program, we believe that Barry property has
a potential to have more than 1 million ounces – for
sure – just on Barry. So down the road after analysing
that diamond drilling program, we believe that we might
be going to have to look at it again because it might
deserve a mill on its own.
Analyst, Jay Taylor: And not have to haul it.
Ghislain Morin, President MTO: Exactly. By the
time we are going to have all those calculations done,
we are going to be close to being ready to get the
underground [at Bachelor Lake Mine] mined out. We have
got to be ready to be in operations from underground at
the Bachelor lake Mine and the mill will be big enough,
capable, to process all that ore. So down the road it
could be two mines ongoing quite easily.
Analyst, Jay Taylor: Well, the interesting thing
too is the open pit mine you can prove up ounces fairly
quickly. So, I would say to investors that this is a
story of production, exploration, and potentially
building up ounces which will also add value to your
share price I think. I think this is certainly a very
exciting story.
Ghislain Morin, President MTO: A good issue I
think we should talk about, that’s the negotiations that
we had with the Cree Nation. Very important, we are
located on their land and business wise talking, it is
going very well with them. This year there will be over
100 young guys that will be 18 years old so we are
working on a training program at Bachelor Lake for them.
Analyst, Jay Taylor: For mining, and they will
feel part of your Company very much.
Ghislain Morin, President MTO: Right now it is
nice to have an open pit, because we only need 15 to 16
men to get all kinds of tonnage at it.
Analyst, Jay Taylor: So now if you can train
them to do underground work. … A very valuable resource
because mining personnel are very hard to come by these
days. That’s a very wise move, forward looking view on
managements part.
Ghislain Morin, President MTO: And they are
close by; only 25 KM from the mine site.
Ronald Perry, Treasurer, and Director MTO: And
the other thing is we need a sustainable business plan,
as well as Jessie says, I mean we may be in the position
to have two mills but then don’t forget we still have
1.5 million of guaranteed exploration, there’s other
people that are always looking for gold, we know who it
is, and it is just a question of negotiations and the
economics justify that they’ll be bought.
Analyst, Jay Taylor: I think it is a very
compelling story, I thank you gentlemen for sharing that
with our viewers and I wish you all the very best.
.
Transcriptionist - MK-089
03/31/08
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