RE:NEWS- Metanor Increases Drill Program for South ZoneFinancing really was not required.........here is why !!!
https://sectornewswire.com/release103015mto.htm
Overview of Metanor: Assets-wise: 1) Steady cash on hand ($4.4M in its bank account and 785 oz of gold stored at the Royal Canadian Mint (as declared in June 1, 2015 news release));
2) Positive working capital, book value at $56 million (>$0.15 cents per share), and infrastructure replacement value on all properties in excess of $100 million;
3) 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 to $15 million in tax credits;
4) ~1.6 million ounces gold global resource in all categories (on all properties, two of which are permitted mines (Bachelor and Barry)).
Liabilities-wise: 1) Metanor has completely repaid its loan to Investissement Qubec (originally $7M), final payment was made this August 2015 (freeing up an extra $525K/mo cash flow (from at its peak)); &
2) Metanor’s remaining convertible debenture has been paid down to $9 million outstanding and the term extended to August 2017.
Pouring gold at Bachelor |
Operationally: Metanor's latest gold production figures reveal the Company is profitable, operating cash flow positively, and successfully executing on cost-cutting measures, delivering cash costs of ~US$850/oz gold with all-in costs of ~US$950/oz. The Company produced nearly 12,000 ounces in the quarter ending Sept. 2014, it then encountered a setback (stope collapse), and has since evidenced an improving trend, producing 10,277 ounces during the quarter ended June 30th 2015, and this improving trend is expected to continue as the Company advances toward normalizing again, and eventually attaining a near-50,000 oz per annum gold production run rate again. The Bachelor Lake mill has a capacity of 1,200 tpd but is currently running at a rate of ~800 tpd, with an effective rate of ~700 tpd with periodic routine downtime for maintenance.
There exists opportunities to expand production beyond the current production capacity of ~50,000 ounces of gold per year; the Bachelor mine sourced rock is 'hard', making it a limiting factor in-part, however this can overcome with a nominal capital outlay to move to 1,200 tpd, also sourcing alternate sourced material from a secondary front is another obvious option in this gold-rich territory -- the flexibility Metanor has on this front positions Metanor's mill as its primary asset and increasingly 'in-play'. Hydro Quebec is planning an area substation for this fall, thus then appears to be the optimum time for Metanor to be positioned to focus on increasing the capacity (Metanor has been waiting for that). The level of interest swirling around Metanor's primary asset appears high -- shares of MTO.V are poised for upside revaluation as the inherent value and accomplishments are appreciated by the market, and apt to respond in multiples as gold retrenches and strengthens.
Metanor is ready to take advantage of three things;
1) improved grades and grade control,
2) foreign exchange (MTO.V is protected to the downside by forex gain from US to CDN, it is currently receiving a ~$365/oz price differential for gold in Canadian dollars over US dollars), and
3) the price of gold.
Metanor is leveraged to grade; if MTO.V improves its grade it will become more profitable, and that is what appears will be the case;
"Metanor anticipates gold grades to average +6 g/t on a go-forward basis." (source: Analyst Secutor Capital Management May 25, 2015). For the fiscal year ended June 30th, Metanor produced 40,067 ounces. A total of 234,826 tonnes of ore at a feed grade of 5.50 grams / tonne were processed during the year with a 96.5% recovery rate. Metanor sold 10,626 ounces of gold in the quarter and 41,242 ounces of gold for the year. The production, in the last quarter, came from the «Main» and the «A» veins. For the coming quarter, the production will continue to come from these two veins with a grade near the current level. Starting this fall, the «B» and «Hewfran» veins will be added to production in addition to the «A» vein. The production from Hewfran is expected to increase the average grade of the mine between 5.8 and 6.2 g/t. For the coming year, Metanor expects to produce between 42,000 and 45,000 ounces of gold. Development towards the west continued in the last quarter on levels 6 and 8, and 14. The development will continue on the same levels during the coming quarters. The exploration program also continued to the west with good results on level 6. The upcoming drill program will aim to connect the sector on level 13 with the known upper sector on levels 6 and 8.