Hot Stocks: Metanor Resources fast becoming a mid-tier player
We like cash, but we love exploration companies that have cash flow. Canadian gold mining company Metanor Resources (TSX.V:MTO) not only has six, highly-prospective gold properties — five in Quebec and one in Ontario — but it also has the funds to help transform the company into a mid-tier gold producer.The company’s latest cash infusion was through an over-subscribed $16.2-million private placement, plus a $9 million installment from Sandstorm Gold Ltd’s $20-million gold purchase agreement.
The funds will help Metanor bring its wholly owned Bachelor Lake Gold Project into production in 2012, with an average projected per-year production rate of 60,000 ounces of gold. The project’s pre-feasibility results released on January 4, 2011, reveals sound economics: the projected total revenue is $215 million; the net present value discounted at 5 per cent is $76.3 million, with a payback time of 10 months. The total unit operating costs are projected to be $103.45 per tonne.
The sinking of the mine’s 2,400-foot shaft is on schedule for completion by the end of this month.
Bachelor’s imminent conversion into a cash cow is just one milestone that presents investors with a lot of upside potential to get excited about. Metanor is also advancing the Barry Gold Deposit, which, together with Bachelor, could propel Metanor into mid-tier producer status producing between 150,000 oz to 200,000 oz per yaer. Barry is located in the Urban-Barry greenstone belt approximately 65 kilometres southeast of the Bachelor Lake mine. It contains indicated resources of 309,500 oz gold (7,701,000 t at 1.25 g/t Au), inferred resources of 471,950 oz gold (10,411,000 t at 1.41 g/t Au), and is wide open for expansion. In late May of this year, significant induced polarization (IP) anomalies led to drilling, the discovery of a new gold bearing zone was made. Metanor is now exploring its full potential.
We certainly see a lot of blue sky potential for Metanor. Four of its six properties — Bachelor Lake, Hewfran, Barry and Dubuisson — have a combined total of approximately 1.6 million oz in gold resources in all categories. Another attractive feature of the company is the fact that five of its projects are located in mining-friendly Quebec; it has the infrastructure of a producer, including a 1,200-tonne-per-day mill (which has a 95-per-cent recovery rate) located in the Bachelor property, and a $500-million tailings pond. Metanor is also fully permitted.
This presentation may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The Issuer relies upon litigation protection for forward-looking statements. This piece is for information purposes only and is not a recommendation to buy or sell any securities.