Gold Producer Metanor Resources Extends its Main Gold Vein 244m Below its Infrastructures
Pouring gold at Bachelor
Bachelor
is a rich underground mine with grades upwards of 26 g/t
gold with an average grade of 7.38 g/t gold
(fully diluted using long hole)
NEW
YORK, NY, March 14, 2014 /Sector Newswire/ - Metanor Resources Inc. (TSX-V:
MTO) (US Listing: MEAOF) (Frankfurt: M3R) has released news of
significance this week regarding achievements at its newly
refurbished Bachelor Gold Mine and Mill in Quebec. MTO.V provided an
update on the ongoing underground drilling program at Bachelor aimed
at defining new resources at depth below level 14 -- further
encountering quality intercepts that are expected to add to
mine-life, extending its Main Gold vein 244m below its
infrastructures. This news follows on the heals of Metanor releasing
financial results for its initial period as commercial Gold producer
with initial cash cost of US$766/oz and also news that it had
produced Gold in the month of February at an annualized effective
rate over 55,000 ounces per annum.
Successful mines in the Abitibi area typically have a few years
of production lined up ahead of time and just keep going for
decades, adding as they go. The two main veins at the Bachelor Gold
Mine run parallel and are 75 feet apart at an 80 degree angle.
Greenstone belts run deep, there are mines at 8,000 – 10,000+ feet, MTO.V is currently only at ~2,300 feet with and is open to continue
on. Metanor recently further sank the shaft 536ft to gain access to
over 300,000oz all categories -- now, with the recent drilling
intercepts, it has confirmed future mining potential down 800 ft
which conceivably translates to the mine life more than double. In
the expansion/exploration efforts Metanor has also proven new
structures/veins. Additionally, at the adjoining Hewfran zone(s)
Metanor is expanding and possibly connecting it to bachelor.
Metanor has a four compartment shaft ready for further
sinking together with a hoist capable of >4,500 feet. One analyst's'
back of the envelope calculation in 2011 estimates the Bachelor/Hewfran
resource at 700,000 ounces as the structure is open in all
directions. This calculation appears to becoming more a reality and
deserved of upward recalculation interpretation closer to 1 million
ounces in light drilling success since.
The news this week of quality
intercepts follows on the heals of Metanor releasing financial
results for its initial period as commercial Gold producer with
initial cash cost of US$766/oz and also news that it had produced
Gold in the month of February at an annualized effective rate over
55,000 ounces per annum. The stage is set for a push to stabilize in
the higher range of a 4000 - 5000 oz per month Gold target (at 800 TPD). Managements near-term plan is to increase the mill capacity by
~50% at low capex (~$4 million) and target 6,500 - 7,500 oz Gold
production per month in late 2015 (contingent of obtaining additional
electricity from Hydro-Quebec planned for 2015). MTO.V with ~267 million shares outstanding provides an ideal vehicle for investors
seeking exposure to precious metals. Shares of MTO.V are currently
trading near C$0.25 and the time to pay attention is now while MTO.V is trading at a fraction (near 1/4) of its infrastructure
(replacement) value alone, ignoring the ~1.6 million oz Gold
resource in all categories (on all properties), and ignoring the
large resource growth potential. Metanor is also
actively advancing on a second front, it's Barry Mine deposit, that
many believe has a the potential to translate to a large increase of
gold ounces in the ground and a significant percentage increase in
production ounces on top of the >6,500 ounces Gold production
per month target expected at Bachelor sometime in 2015.
Metanor currently has 7 active drills
at two locations. Metanor's displays growth aspirations and commitment to add
value through development, production, and exploration. Metanor has
a permanent program underground at Bachelor with 3 to 4 drills
ongoing, plus there are 2 drills at surface at Bachelor -- the shear
volume of drilling on quality ground is bound to create steady
news-flow and catalysts for shares of MTO.V.
Metanor offers increasing attractiveness as a gold producer with
apparent growing future resources, plus MTO.V also offers a
significant latent tax savings windfall for a future acquirer.
Metanor has accumulated a large loss carry forward to get to the
point where it is now as a new successful gold producer. A
profitable mid-tier or senior producer (potential acquirer) may need
to shelter income from corporate income taxes, hence when it
acquires a new gold producing company it is able to deduct the
losses of the new gold producer against its own. Therefore in
Metanor's case, should a takeover occur by a profitable entity, it
would immediately be able to realize a cash savings from income
taxes due to a loss carry forward of >$50 million, resulting in a
cash gain (assuming a simple 33.33% corporate tax rate) of more than
$17 million. Deduct that $17 million from the current market cap of
MTO.V and it becomes obvious that shares of MTO.V are dramatically
undervalued; its infrastructure, resources, and gold production
capability plus related growth dictate the share price of MTO.V are
poised for significantly more upside revaluation.
Excerpt Metanor's March 13, 2014
release:
Metanor Extends its Main Gold Vein 244m
Below its Infrastructures
Metanor Resources Inc. ("Metanor") (TSX
VENTURE:MTO) is
pleased to
provide this update on the ongoing
underground drilling program at Bachelor
aimed at defining new resources at depth
below level 14.
Metanor, still
in the early stages of the at depth drill
campaign, has intersected the extension of
the «Main» vein, 244 meters below level 14.
The drill campaign is continuing in this
same sector to further expand the «Main»
vein vertically and horizontally.
The table
below summarizes the intersection obtained:
Hole No
From
(m)
To
(m)
Length
(m)
Grade Au
(g/T)
Zone
E14-03
376,7
379,6
2,9
6,23
Main (M)
True core
length.
The true width
is 65% of the core length obtained in the
diamond drill hole in the «Main» vein. The
cut-off grade used in the analysis is 51,5
g/T or 1,5 oz Au. The samples were assayed
by fire-assay at the Metanor assay lab. The
quality control program of the assay results
(QA QC) adopted by Metanor includes a
minimum of 10% of controlled assays being
conducted as well as verification by an
independent external assay lab.
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 mentioned.