Excerpt from the Jay Taylor Gold Newsletter 4-9-10 : "
Stock Pick of the Week
Metanor Resources Inc.
Business
: Exploration, development, and production of gold in
Quebec
Traded TSX: MTO
Pink Sheets: MEAOF
Shares Outstanding: 128,225,005
Initial Recommendation 1/25/08:
.84
Price 4/9/10:
.60
Market Capitalization: $77 Million
Oz. Gold Resource: 1,038,000
O/W. 43-101 938,000
Historical: 100,000
Progress Rating: “A”
Telephone: 819-825-8678
Web site: www.metanor.ca
6
I interviewed Ron Perry, vice president of Metanor Resources Inc., on my April 6 radio show. You can listen to Ron’s update on Metanor at https://www.voiceamerica.com/voiceamerica/vepisode.aspx?aid=45513. If you want to listen to this interview specifically and skip my introductory remarks and those of Marc Faber and Chen Lin (though I don’t recommend you do that), you can move the dial over to the 21-minute, 45-second time spot for last week’s show. My interview with Ron Perry of Metanor lasted about 11 minutes. Here is the transcript:
Jay Taylor: Welcome, Ron, to Turning Hard Times into Good Times.
Ron Perry: Well, thanks for having me, Jay.
Jay: It’s a pleasure to talk to you again. Folks, I’m talking to Ron, who is up in Val-d’Or, where Metanor’s corporate office is located. Chen and I made that trip up there in January in the dead of winter when it was about 20 degrees below zero. We traveled from the Barry Mine and then by way of a snow road to the Bachelor Lake Mine and Milling Complex.
So Ron, I would like to ask you, with respect to the open-pit Barry Mine, how are things coming along?
Ron: I will go right into it, Jay. At Barry right now, the key thing that’s pending now is an updated NI 43-101 resource report. We expect news, the final numbers, before the end, in a month, which we will make public.
Don’t hold me to the date—but there is also a geological program called the Core Box here in Vald’Or, at which event we will display the geological model for the Barry Deposit as well. One of our major shareholders is a geologist and representing a fund and wants us to do that. So we will show the deposit to the world, because we think the potential here is still great. So the updated 43- 101 numbers are not yet in, but that is something that's eminent. We expect to have them by the end of this month. I think, for your readers, listeners, and our investors, it's a key thing. I think it could be a turning point for the stock.
In the last press release when we announced the 43-101 is coming, I also put out all the past drill holes to give people an indication of what’s there. Sometimes over a period of years, people forget some of those drill holes and when you start to look at some of those drill holes, it gets quite impressive. There is a lot happening in the area too with other companies. Eagle Hill had some good intercepts, as did Noront on their Windfall Property. We still believe that the Barry-Urban Township is a new mining camp. We have been saying that for quite a while, and I think hopefully with the new 43-101, we will add some more proof to that.
With regard to the mill at Bachelor Lake, we just announced in that same press release that the capacity construction is complete, and that we are in the middle of commissioning. We went from an 800-ton capacity to 1,200 tons capacity. At present, we are running 1,000 tons per day through the mill.
That is our third upgrade in about two years. The company started at 400 to 450 short tons per day. We did an upgrade to 700 metric tons per day then expanded it to 800 metric tons per day. Now we are up to a 1,200-tonne-per-day capacity. We have installed a rod mill and a lot of changes in the circuit.
As for the mill’s efficiency, we are getting recoveries back up into the 94% to 96% range. So we are stable at over 1,000 and then we will start to move that up again. So it's going very well from that perspective and the 43-101 is on its way.
At the mill, right next door is the mine. The head frame is done. The new hoist, the 10-foot hoist, has been installed and it has been commissioned. It’s working. It’s all done. And last but not least, we finished the shaft alignment. Once you get into these deep deposits, you go down 3 times the level of some of the taller buildings in Montreal. There was a lot of stuff to replace in that project, which resulted in us going over budget and it took longer than we expected. Next, we will be giving the contract to sink the shaft further down. Then we will be on our way at the Bachelor Lake Underground Mine.
The last point I want to make in giving you a progress report is that once the 43-101 report is out on the Barry Deposit, Andre Tremblay, our geologist, and our team ill reanalyze how we will commence the next drilling campaign, because obviously e want to grow the resource. There will be a lot of ways to attack that drilling campaign, because a lot of the numbers that you are going to see are probably going to be more from a 100-meter depth. If you go to our Web site, there are a couple of slides that will show you that there have been drill intercepts that are structured at 400 meters down.
So this is the key thing as far as investors are concerned. We are going to show you number and then people will be able to get an idea as they go down, by depth, ow the resource is going to increase it. We still believe it’s a big pit.
Jay: Okay. Chen, have you got a question for Ron?
Chen Lin: Yeah, sure. Ron, so your mill capacity increased to 1,000-1,200 tonnes per day. Do you think the Barry Mine will be able to feed the mill at that rate?
Ron: We feel that there is ample plunge there to feed the Barry, there is no question about that. And the plan is, as we always said, once we are underground at Bachelor, we want to grow our production to 70,000 ounces per year. We plan to roduce 700 tonnes per day from the Bachelor Lake Mine and 500 tons from the Barry Open-Pit Mine. Then we will continue exploration programs on both mines.
But there is no question we could get to the next level of production using just Barry with Bachelor, and then we can look to the future. Our opinion is that, maybe two years from now there is either a concentrator or a mill on site at the Barry Mine, because we strongly believe—we said that publicly a year-and-a-half ago—that we think the Barry Pit has got a lot of potential. It’s not only just a one-kilometer strike length. We know that we have a diagnosed study that has four kilometers potential strike. We have another—we just did some IP that outlines 64 anomalies. So there is a lot of potential here on the Barry and we think it will eventually justify its own concentration mill. With a concentration mill, we would like to get to annual production of 150,000 ounces per year.
Also, I would like to mention that we can always replace ounces. There are some small deposits in the area, so we can even still do some guaranteed exploration. But if you ask if I want to make an acquisition this year, I would rather invest in the drilling program, because Barry is—we want to redefine—keep defining that resource on the increase.
Jay: Ron, as I recall, when Chen and I were up on your property, the grade you were mining from the Barry Open Pit was something like 2.8 grams. That was what you were shipping from the Barry Deposit to the Bachelor Mill. Could you tell our how far you have to haul the ore from the Barry Lake Mine to the Bachelor Lake mill?
Ron: As the crow flies, it’s 65 kilometers, but the road is 116 kilometers. We are probably going to knock about 15-20 kilometers off of that, because there are some logging people in the area and they are doing a new road, which we will have access to. That will shorten the distance by 15-20 kilometers. But there is no question. I mean, transportation is the key, and that’s why we want to blend the ore. But once you remove the transportation, if you had a mill on site, that means Barry becomes an unbelievable, profitable exercise once you have a mill in place.
Jay: Okay, because as I recall, it was something like a half a gram or so of gold that you are giving up in the transportation cost between Barry and Bachelor. So after you deduct 0.6 grams/tonne transportation cost, it amounts to an effective mill head grade of 2.2 grams per tonne or something like that. Right?
Ron: Yes. The cost per tonne for hauling is $19, including maintenance.
Jay: Nineteen dollars a ton. Okay. So it’s a significant cost. So the idea here is, if the resource at Barry justifies building a concentration mill, that’s something that you may consider doing in the future, and then haul a concentrate over to the Bachelor Lake Mill?
Ron: Yeah, that’s one of the options. But we are forward thinking now.
Jay: Okay. Well, I think that’s excellent. Anything else, Chen? Any other questions you might have for Ron?
Chen: No, not at this moment.
Jay: Okay. Excellent Ron! You guys are cashed up now; you are not going to have to raise any more money anytime soon are you?
Ron: Well, we are not looking at raising any money right now. But we always look at what we have to invest, and I think we are at a point there that the company can look at maybe some debt in the future or some of the capital expenditures. We are getting to the point that we are . . . we have a small line of credit, but that wasn’t really with proper, big institutions. So I think if we do something, we would look at that; we are trying to watch the dilution now. I am a shareholder.
Serge is a shareholder. Ghislain is a shareholder. So we are trying to be cautious about the dilution factor.
Jay: Excellent! Well, that’s good to know, because I think a lot of times that gets lost in the desire to build a big mining facility. So we are thankful to you, Ron, for sharing with and updating our listeners about your progress, and we look forward to talking to you again sometime in the future.
Ron: Well, thanks for having me, Jay.
Jay: As always, my pleasure.
EDITOR’S COMMENTS: There is no way of knowing for sure what the 43-101 resource will look like, but
based on the drill holes that Ron mentioned in my April 6 discussion with him and a sense of the optimism
coming from those close to the exploration program, I’m looking for a positive surprise with the updated NI 43-
101 resource. If I’m right, the shares could be significantly stronger on that news. Longer term too, I remain
very bullish on this stock. "