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NEW
YORK, NY, May 20, 2016 /Sector Newswire/ -
Metanor Resources Inc. (TSX-V: MTO) (US Listing:
MEAOF) (Frankfurt: M3R)
this week announced additional encouraging results from its
Spring-2016 drilling campaign at its Barry Mine open pit gold
deposit, located ~65 km (~116 km by road) from its Bachelor Mine and
Mill in Quebec.
This weeks news falls on the heals of a series of
noteworthy developments involving the Company, including
Eric Sprott increasing his equity position in MTO.V. Metanor is
predicting to be cash flow positive, is poised to excel with
high-grade (between 6 g/T - 9 g/T) gold Hewfran sourced ore coming
online, is building serious new ounces in a new gold system adjacent
the mill, and is rapidly advancing toward a scenario that could see
it reopen mining its nearby Barry open-pit
as a second front under an improved high-grade model.
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Fig 1. (above) Metanor's Barry
Pit section view looking north-west, filtered to show high-grade
intercepts. The outline of the old pit is seen in green, it was
mined to only ~28 m at its deepest point and is essentially ready to
go back into service. The present gold corridor is nearly 1 km long
with a width of approximately 140m.
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MTO.V geologists are working under an updated interpretation of the
orientation of the high-grade shoots at the Barry Mine. The old
interpretation had two shoots dipping down, they are now viewed as
three stacked shoots more horizontal than they are vertical. The old
off-orientation interpretation resulted in the mixing of high-grade
with low grade, lowering the high-grade and smearing the gold into
lower grade, resulting in a lower average grade when estimating and
block modeling. Now the geologists are collecting and affirming data
under the new model that constrains the envelopes which contain the
high-grade, Mining MarketWatch Journal believes this has the
potential* to yield in excess of 1 million ounces and better grades
than the current near-800K oz resource (in all categories).
Metanor originally mined ore from Barry when it first took the
refurbished Bachelor Gold Mill online several years ago, while it
was still prepping to access the high-grade underground ore at
Bachelor mine, it poured a total of ~45,000 oz gold from Barry
sourced ore during that initial interim period. Metanor is currently
using consultants, looking at a new potential mining scenario, and
has been conducting drilling in the pit with the aim of targeting 2+
g/T gold material. Recent drilling at Barry is yielding affirming
results that extend the mineralized zones and validate zones at
higher grade in the new mineralisation model proposed by Claude
Duplessis, Ing., the qualified person from Goldminds Geoservices
(e.g. April 27, 2016 intersecting 5.4 g/T gold over 9m, and May 19,
2016 intersecting 2.3 g/t Au Over 60m on Surface). The Barry deposit is
essentially ready to go, geologists are pinpointing the high-grade,
and within the year it is possible Metanor could be back in
operation at Barry. Additionally, Barry sourced ore is not subject
to the Sandstorm gold participation agreement.
 With a current market
capitalization near-$38 million Canadian (431,274,449 shares
outstanding X ~9
cents) MTO.V
presents a significant opportunity for shareholders as its primary asset,
the Bachelor Mill, has a replacement value numerous times the
Company's current market cap and is increasingly being viewed as a coveted
strategic asset being the only mill within 200km in a gold-rich
district.
Metanor is also in the process of adding serious
new gold ounces adjacent its mill as it continues to systematically drill to define
a new high-grade system in a previously unexplored region (known as
the South Zone/Moroy Property) located south of
the pluton, only ~900 meters south of the headframe at Bachelor. Drilling in this new area began in
earnest following its September 22, 2015 new discovery zone
announcement of 10.1 g/T Gold over 26.2 m. Results to date in this
new South Zone have been stellar, the new system appears to be huge
and to be of higher average grade and thicker structure than the
Bachelor/Hewfran sections. New in-hole geophysics reveal
high-priority target anomalies of conductors that have correlated
well with high-grade gold found to date, and are highly perspective
for large gold values Metanor will be targeting in the months ahead;
Metanor is near the beginning of a 60,000 m drill program on the
Moroy property. Mr. Thibaut Lepouttre, Managing Director at
Belgium-based mining and commodity research BVBA firm Caesar
published a report in Q1-2016 in which he extrapolates results to
date and sees potential* for 1,000,000+ new high-grade ounces from
the South Zone.
Fig. 2 Primary
asset:
100%-owned Bachelor Gold Mill
Forward looking
operationally Metanor is expected to excel (cash costs are expected to drop
dramatically): The
Company is aiming to attain a 40,000+ oz per annum gold
production run rate. Sophisticated investors know a mine is not a
homogeneous unit; there are lower-grade areas, average-grade areas,
and higher-grade areas -- Metanor had been mining sub-5 g/T for
the last several months however that is expected to change going
forward as the Company is expected to begin (this spring-2016) processing
higher grade Hewfran section ore with grades between 6 g/T and 9 g/T and cash costs are expected to drop back
down. For the current year, Metanor has stated it expects to
produce 40,000+ ounces of gold. The Bachelor Lake mill has a capacity of
1,200 tpd but is currently running at a rate of ~800 tpd, with an
effective rate of ~700 tpd with periodic routine downtime for
maintenance.
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Pouring gold at Bachelor |
There exists
opportunities to expand production beyond the current production
capacity of ~50,000 ounces of gold per year; the Bachelor mine
sourced rock is 'hard', making it a limiting factor in-part, however
this can overcome with a nominal capital outlay to move to
1,200 tpd, also sourcing alternate sourced material from a
secondary front is another obvious option in this gold-rich
territory -- the flexibility Metanor has on this front positions
Metanor's mill as its primary asset and increasingly 'in-play'.
Hydro Quebec is expected to complete an area substation near-term,
afterwich may be the optimum time for Metanor to be positioned to focus
on increasing the capacity (Metanor has been waiting for that
substation). The
level of interest swirling around Metanor's primary asset appears
high -- shares of MTO.V are poised for upside revaluation as the
inherent value and accomplishments are appreciated by the market,
and apt to respond in multiples as gold retrenches and strengthens.
Besides improved grades and grade control
on tap, it is important to note that Metanor also benefits from
foreign exchange, receiving a ~$390/oz price differential (as of
May 19, 2016) for gold
in Canadian dollars over US dollars).
Metanor currently has
two permitted mines:
1) Bachelor Mine: 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). Recent drilling results continue to
demonstrate, in-part, Metanor's ability to readily extend the
mineable life of Bachelor, similar to how other successful area
miners have operated (and several continue to this date) --
typically lining up a couple years of initial quality mineralized
material but remaining operational for many decades, adding as they
go. MTO is able to sell 80% of its Bachelor Mine sourced gold at
spot prices with the balance sold to Sandstorm as per gold
participation agreement (Note: this arrangement is only on
Bachelor-area sourced material, Metanor's mill is a separate asset
that is 100%-owned by the Company and the mill may be used to
process material sourced from outside Bachelor without restriction
(for Metanor's sole-benefit) as long as it meets minimum covenants
to Sandstorm -- covenants Metanor has been more than able to satisfy
to date).
2) Barry Gold Project, Quebec (located ~65 km from Bachelor):
The 100% owned Barry property is neighbor to Oban Mining's Windfall
Lake Deposit (formerly owned by Eagle Hill). The resource estimate at Barry now sits at 309,500 oz
Gold of Indicated Resources (7,701,000 t at 1.25 g/t Au) and 471,950
oz gold of Inferred Resources (10,411,000 t at 1.41 g/t Au) and is
wide open for large resource growth expansion. The current 1km
strike at Barry is potentially 13km, there are in excess of 150
anomalies outside the pit area. The Barry deposit is a potential
multimillion ounce target; the independent international professional
geological firm SGS Geostat has identified Metanor’s Barry deposit
as comparable in potential to rival other multi-million ounce
deposits such as Canadian Malartic gold deposit (formerly owned by
Osisko, now owned by Yamana and Agnico-Eagle) & Detour Gold's
Detour deposit. Important to note
is that Osisko Gold Royalties has recently orchestrated acquisitions
near Metanor's Barry deposit (via Oban Mining).
Metanor is currently studying the possibility
of restarting gold mining operations at the Barry Property. Ghislain
Morin, President and Chief Executive Officer of Metanor stated: "We
feel that the metrics are optimal for a restart of operations at the
Barry Pit. Our surface infrastructure is still operational, and the
mining permit is still active. Combining this with the current low
fuel prices and a gold value of $1,700 per ounce in Canadian
dollars, we see restarting as an attractive option for the Company
at this time." The technical and management teams at Metanor are extremely
competent, having acquired a great deal of experience over the
years, and start-up costs are forecast to be relatively low. No
processing problems are anticipated, as processing of previous Barry
Pit ore was handled by the nearby Bachelor Mine treatment plant, at
a maximum of 1,100 tonnes per day.
Other than a 1% royalty (NSR), an additional 2% NSR is payable on
metals derived from 13 claims, representing 10% of the property.
There are no other obligations arising from production from the
Barry open pit.
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Sector Newswire has
identified the following research links for additional DD on Metanor
Resources Inc.
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