Metanor Resources MEAOD

RE: RE: A few pennies to be made..

[JRaffles]

I agree that there is huge potential with this stock, which has an oversupply of quality projects.  The main hurdle to overcome is to source capital which is urgently required to move both Bachelor and Barry forward in order to maximize their potential in the shortest period of time. If too much new equity was raised at the present relatively undervalued SP, then a market cap of $900k could be reached [approx 130m shares @ $7], but existing shareholders may be diluted excessively, unless there were to be a large increase in the current share price to raise fresh capital.

The dilemma for directors, regarding where they will direct scarce capital resources, is one that most companies would be happy to have.  In my view, there are a number of options available to directors:-

1. Conclude that the resource potential for Barry is potentially so significant, that they sell Bachelor mine and related properties and use the proceeds to advance Barry to, say a 5m oz open pit reserve with a concentrator / mill. At a resource value of $100 ounce in the ground for a producing open pit, this could put a value of $3.90 share [5m oz x $100 /128m shares].
2. Sell Barry and retain a NSV and concentrate resources to mine the high grade Bachelor ore. The 1200 tpd mill could produce a high annual output of 100k oz at 8g grade. 
3. Joint Venture Barry with a major / intermediate producer. If Metanor were to be taken out by a major gold miner too early, then any new resource expansion at Barry would be diluted too widely.
4. Merge Metanor with a similar cap producer with cash resources.  An example being Richmont which may now have over $30m cash and producing mines, but low reserves for its market cap. A merger would result in Metanor bringing the largest oz in the ground and therefore the largest % of shares in a merged company.   This combination with a joint cap of about $200m & cash would enable Metanor's projects to be developed quickly.

It is open to conjecture what form of expansion directors decide to follow.  However, minor private placements of capital would probably be expensive and hold back the rapid development of Metanor's Barry & Bachelor projects.

It will be interesting to follow events carefully in order to see what course will ultimately be followed.