Sector NewswireTM
Sector: Mining - Metals and Minerals :
News Release - May 23, 2015 2:15 PM ET
Metanor Resources has cash cost of US$849/oz Gold – Financial results for last quarter Ended March 31, 2015
NEW YORK, NY, May 23, 2015 /Sector Newswire/ - Metanor Resources Inc. (TSX-V: MTO)(US Listing: MEAOF) (Frankfurt: M3R) has released financial results for the quarter ending March 31, 2015 (the Company’s Q3). Mentor is a commercial gold producer at its 100%-owned Bachelor Gold Mill in Quebec, with ore mined from beneath at its Bachelor Lake Mine. It appears Metanor is successfully executing on cost-cutting measures and is operating cash flow positively, delivering cash costs of US$849/oz gold with all-in costs of US$959/oz.
MTO.V currently has a market capitalization of ~$16 million (recent share price @~4.5 cents with 356.6M shares outstanding) and presents an exceptional risk-reward scenario. Metanor is successfully pouring gold at a positive cash flow rate after implementing cost-cutting measures and executing on a turnaround in production; the Company was at almost 12,000 ounces in the quarter ending Sept. 2014, it then had a setback to 8,300, and has evidenced 9,860 in the latest quarter. Metanor has also evidenced positive working capital in its latest numbers, and with the spot price of gold stable (currently at ~$1,480/oz Canadian) it appears Metanor should continue to deliver well. Metanor has also improved cash flow savings from debt servicing (saving ~$325,000/month) with Investissement Quebec by lowering its outlay from $466,000 plus interest to $161,000 plus interest per month, and that will be fully paid by the end of this August-2015.
Metanor's share price appears poised to increase substantially in value when the gold mining sector comes back into favor, especially considering it is a producing gold mine with its own 100%-owned mill sitting uniquely geographically as the only mill located within 200 km in a gold-rich district. MTO.V is currently trading at a fraction (below 1/8) of its ~$200 million infrastructure (replacement) value alone, ignoring the ~1.6 million oz global gold resource in all categories (on all properties, two of which are permitted mines (Bachelor seen above and Barry)), and ignoring the large resource growth potential. MTO.V also offers a significant latent tax savings windfall value for a future acquirer with a loss-carry-forward on the books of ~$40 million, the impact could generate $12 million - $15 million in tax credits (that is near the current market cap of MTO.V, certainly an indication the share price is a serious buy here). Metanor is currently trading at approximately 1/4 its current book value (book value is >$50M) and this is after it wrote-down ~$10 million of assets in 2013. As gold retrenches, and strengthens, MTO.V harbors potential to leverage to a multiple of book value and a multiple of earnings. The current production capacity of Bachelor is 800TPD, however with the mill closed for maintenance every month for a few days the effective rate is nearer 700TP -- the production capacity can be increased to 1,200TPD with relatively nominal capital outlay (estimated at ~$5 million), however such a step is likely best taken when market conditions for the underlying commodity are stronger and reserved for processing ore from a second front.
Excerpts of Metanor Resources' latest (May 22, 2015) news release:
Metanor Reports its Financial Results for the Quarter Ended March 31, 2015
VAL-D'OR, QUEBEC--(Marketwired - May 22, 2015) - Metanor Resources Inc. ("Metanor") (TSX VENTURE:MTO) is pleased to is pleased to report on its financial results for the quarter ended March 31st 2015 (Q3). This press release should be read in conjunction with Metanor's quarterly financial statements and accompanying notes and the related Management's Discussion and Analysis (MD&A), which can be found at www.metanor.ca or on SEDAR www.sedar.com. All amounts are in Canadian dollars unless otherwise stated.
Q3 Highlights
- Gold sales of 9,518 ounces;
- Gold production of 9,860 ounces;
- Total of $13,498,749 in revenues from gold sales at the average sale price of $1,418 per ounce sold (US$ 1,149);
- Cash Cost of $1,047 per ounce sold (US$ 849);
- Sustaining cost of $1,162 per ounce sold (US$ 943);
- All-In cost of $1,182 per ounce sold (US$ 959);
- Net change in cash of $932,332 ;
- Cash flow from operating activities of $491,661;
- Net Income of $16,578 after depreciation and depletion of $3,075,784;
- Partial repayment of $1,000,000 on the capital of the convertible debentures and extension of maturity date on balance of $9,000,000 to August 22, 2017;
- Financing of $3,000,000 by way of private placement.
|
March 31, 2015 |
|
March 31, 2014 |
|
| Operational Results |
|
|
|
|
| Tonnes milled |
60,365 |
|
60,497 |
|
| Feed grade (g/t) |
5.3 |
|
6.7 |
|
| Mill recovery rate |
96.1 |
% |
96.8 |
% |
| Ounces produced |
9,860 |
|
12,641 |
|
| Ounces sold |
9,518 |
|
13,700 |
|
| Underground development (metres) |
1,920 |
|
1,751 |
|
| Diamond drilling (metres) |
4,398 |
|
10,550 |
|
| Financial Results (thousand dollars) |
March 31, 2015 |
|
March 31, 2014 |
|
| Gold Sales |
13,499 |
|
18,408 |
|
| Operating Costs |
(9,681 |
) |
(12,833 |
) |
| Royalties |
(279 |
) |
(333 |
) |
| Depreciation & depletion |
(3,076 |
) |
(4,609 |
) |
| Gross Profit |
462 |
|
632 |
|
| Other Expenses |
(847 |
) |
(1,250 |
) |
| Operating Loss |
(385 |
) |
(618 |
) |
| Financial Expenses & Revenues |
235 |
|
(1,302 |
) |
| Deferred Income Taxes |
167 |
|
-- |
|
| Net Results |
17 |
|
(1,919 |
) |
...click here for full copy from source |
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Last week Metanor announced news of continued quality high-grade intercepts at its Bachelor Lake mill and mine located along the prolific Abitibi Greenstone belt in mining-friendly Quebec, Canada -- see related May 14, 2015 release entitled "Metanor Intersects 12.24 g/T Over 4 Meters in the Hewfran Sector of the Bachelor Mine". Bachelor is a rich underground mine with grades upwards of 26 g/t gold with an average grade of 7.38 g/t gold (fully diluted using long hole). Last weeks drilling results were from the Hewfran sector of the Bachelor Mine project, confirming a new zone off level 6. This follows on the heals of high-grade intercepts from the Bachelor claim block side (i.e. on level 13 see related March 30, 2015 news release entitled "Metanor Intersects 8.64 g/T Over 5.8 Meters at Bachelor Mine"). These results (and others) demonstrate, in-part, Metanor's ability to readily extend the mineable life of Bachelor, similar to how other successful area miners have operated (and several continue to this date) -- typically lining up a couple years of initial quality mineralized material but remaining operational for many decades, adding as they go.
Figure 1. (above) Bachelor Gold Property Mine Claim blocks (Bachelor & Hewfran) -- both claim blocks belong 100% to Metnaor, however historically they had different ownership and were not explored to their potential. Metanor’s Bachelor mine was built alongside a pluton discovered on its property. The shaft at the Bachelor Gold Mine has been sunk to 2,400 feet so as to access known resources at that level, however it is believed the gold runs much deeper and Metanor is in a position to identify 1.5+ million ounces going forward. The two main veins at the Bachelor Lake Gold Mine run parallel and are 75 feet apart at an 80 degree angle. Greenstone belts run deep, there are mines at 8,000 – 10,000+ feet such as area miners Aur Resources (now Teck Cominco), Agnico-Eagle and Sigma. The gold grade at the Bachelor property increases at depth and the strike is open in all directions at the 2,400 foot mark. All of Metanor's recent drill results have been near existing infrastructure at Bachelor, making the high-grade material easily accessible. Metanor has not performed a 43-101 incorporating significant drilling since opening and therefore can not show a revised resource yet -- the completion of a resource calculation is a possibility in the second half of 2015. It is not uncommon for mines in the Abitibi region to simply keep drilling as they follow the vein, and progressively add life (e.g. Richmont's Beaufor has operated for 25 years with often only ~1 year mine-life, and is still operational).
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 any of the securities mentioned.
SOURCE: Sector Newswire editorial
editorial@SectorNewswire.com
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