Sector Newswire_TM

Sector: Mining - Metals and Minerals  :

Sub sector: Precious Metals  :

News Release - October 23, 2009 2:34 PM ET  

Gold Mining Company Metanor Resources' 20,000m Drill Campaign at Barry Open Pit to Expand on New High Grade Zones   

To date Metanor Resources Inc. (TSX-V: MTO) (US Listing: MEAOF) (Frankfurt: M3R) has poured over 27,000oz of gold from its Barry open pit deposit where a new 20,000m drill campaign will expand on new high grade zones. The Barry pit is an integral part of Metanor's gold production business model whereby MTO is on schedule and under budget to bring high grade underground ore online by mid 2010. Additionally MTO.V plans to increase capacity up to 1200 TPD in the Fall of 2009. The Mill is currently operating at 800 TPD with recoveries of ~95%. Fundamentally MTO appears exceptionally undervalued -- has no long term debt, is domiciled in a stable jurisdiction, has a growing resource base, and is currently trading at a mere fraction of its 100% owned ~$140M infrastructure value.

NEW YORK, NY, October 23, 2009 /Sector Newswire/ - Precious Metals Review of Metanor Resources Inc. (TSX-V: MTO) (MEAOF.PK) (Frankfurt: M3R) provides insight into the opportunity afforded investors as it executes upon its gold production business model which includes accessing high grade underground ore and substantial resource expansion.

The full Precious Metals Review / Valuation Analysis Commentary with chart may be seen at http://preciousmetalsreview.com/PMRmetanor.pdf online.

Excerpts:

"The 100% owned open pit Barry Deposit is the sole source of ore extracted to date where over 27,000 oz gold have been poured from Metanor’s 100% owned 1,200 (upgradeable capacity) TPD gold mill in mining friendly Quebec. Gold production from the Bachelor Lake Mill in 2010 should conservatively come in at 50k+oz and then onto generating ~70K ounces/yr when Bachelor Lake underground comes online expected mid 2010. It now appears the Barry pit will no longer simply be an interim source until the high grade underground source at Bachelor Lake is operational. MTO.V has had very good intercepts of late at the Barry deposit (See Oct 20, 2009 and Sept. 24, 2009 release i.e. ‘METANOR DRILLS 9.24 g/t Au over 33m at BARRY’) -- these results affirm the continuing expansion and long term viability of the deposit. In light of the announcement this month “METANOR launches 20,000m drilling campaign” and the fact 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, among other indications – it is believed by geologists that the Barry Deposit like the gold grade at their Bachelor Lake property increases at depth and the strike is open in all 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.
 
Fundamentally Metanor Resources Inc. appears exceptionally undervalued and the stock of MTO.V is poised for significant upside revaluation as the Company executes on its plan to build ounces in the ground at multiple locations near their mill and is on target to go underground at Bachelor Lake by July 2010 – positioning MTO.V as a very profitable gold producer at 1200TPD production with high grade ore. Highlights and preconditions identified on page one of the recent Northern Securities Analyst report (available here) that places an ‘initial near term’ valuation target for shares of Metanor Resources Inc. at $1 per share are all being satisfied and surpassed. A $3 per share valuation was placed on Metanor by Howlett Research upon execution of plans."

 
Valuation Analysis/Commentary:
The current market cap of MTO.V is less than ~65% the replacement value (~CDN$140M) of their infrastructure alone, ignoring the 1M+ oz gold resource, with ever expanding & further significant exploration potential, with substantial revenue projections. MTO.V has ~1,000,000 oz of Gold (NI-43-101 measured and indicated) available from their three properties. The ongoing exploration drill program at their ever expanding Barry deposit is just one of many venues to expand the resource base and is exceeding expectations. Their forward projected EPS will likely be very significant as a debt free unhedged gold producer and the current market cap relative to expected revenues is disproportionate; with less than 106M shares outstanding and trading under CDN$0.90/share, the market cap of MTO.V relative to its resource base/production expansion plans and future revenues make MTO.V among one of the most attractive vehicles for gold investors…

The full Precious Metals Review / Valuation Analysis Commentary with chart may be seen at http://preciousmetalsreview.com/PMRmetanor.pdf online.

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 and of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure located at the above referenced URLs.

SOURCE: Sector Newswire per: Precious Metals Review

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