Metanor Resources MEAOD

RE: Grinding along and more

[JRaffles]

I agree that MTO should be granted latitude to deliver the results of the Barry 43-101. When Barry was purchased, it was at a very low capital cost since there was a high 9% smelter royalty.  One of the share issues was in consideration for reducing the smelter royalty to a very low %, which is crucial to capitalising on the value when an expanded gold resource is calculated based on the recent years of drilling. The deferred drilling cost in the March 2010 quarter numbers is $16m.  Assuming gold in the ground for this producing mine is $100 ounce, then a 43-101 exceeding 160,000 ounces would exceed the cost of obtaining the 43-101. However, there is a real prospect, that the resource to be reported to the company this month, could exceed this by a significant margin and transform Barry into the flagship investment for the company.

If the 43-101 were to be close to 1m ounces, then MTO may be in a position to raise additional capital to install a crushing plant at Barry, which would reduce haulage costs significantly and release the Bachelor mill for more high grade Bachelor output. If the Barry 43-101 was favourable, then MTO could raise capital at a significantly higher issue price.

Until the first quarter of this year, my main investment was Richmont RIC (mkt cap ~ $125).   Although that company share price has performed well in recent years, it may be constrained by lack of proven resources.  Therefore, I transferred my RIC investment into MTO. RIC is cash rich and seeking JV's.  It would not surprise me therefore, if an option for MTO was a JV with a company such as RIC, in order to fastrack Barry production.

Time will tell.