Feature article May 12, 2016:
Gold Producer Metanor advancing Barry pit toward reopening under new high-grade model, and poised to outshine operationally at Bachelor
 | Metanor Resources Inc.
(MTO.V) (MEAOF.PK) (M3R.F) |
Trading with a market cap near-$38 million Gold producer Metanor is a bargain, healthy operationally & balance sheet-wise, and in the process of building serious new ounces;
 Assets-wise:
- Steady cash on hand;
- Positive working capital, book value at $52 million (>$0.12 cents per share), and infrastructure replacement value on all properties in excess of $100 million, including a 100%-owned mill;
- MTO.V also offers a significant tax savings windfall value for a future acquirer with a loss-carry-forward on the books of close to $50 million, the impact could generate $15 million to $17 million in tax credits; and
- ~1.6 million ounces gold global resource in all categories (on all properties, two of which are permitted mines (Bachelor and Barry).
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Liabilities-wise:
- 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); and
- Metanor’s remaining convertible debenture has been paid down to $9 million outstanding and the term extended to August 2017.
| Mining expert Jay Taylor of Hard Money Advisors Upgrades Metanor Resources to BUY with $0.20 Canadian price target:
"...if management can start to grow this company with internally generated cash funds and increase production from Barry, an upside considerably beyond US$0.10 is possible. However, given the company’s current assets, plus all it has going for it in terms of its exploration potential and the potential to combine its assets more efficiently under a well capitalized company, my view is that Metanor will become a takeover candidate by Osisko Gold Royalties or another major operating in Canada, and a sweetener for a suitor would be a tax loss of $15 million. If I’m right and gold is now starting out its next leg up in this secular bull market, a move upward into the US$0.06 to US$0.15 range could come sooner rather than later."
- J. Taylor Feb-2016
Gold Producer Metanor Resources Inc. Interview and Update with Mining Analyst Jay Taylor
- Quality positive cash flow on tap.
- Building serious new gold ounces at Moroy Property South Zones in walking distance from Metanor's Bachelor Mill.
- Studying restart of mining at Barry Deposit as a second front.
- Balance sheet / book value / asset value -- the share price/market cap is on sale relative to its inherent value; "The sum of the parts is greater than the whole" with 100%-owned mill and infrastructure, and gold ounces at two permitted mines.
"...look at the relative value; it looks like, especially if we've got wind at our backs on a new gold bull market starting, I think people are going to make a lot of money with Metanor if conditions remain as they are."
- J. Taylor. Feb. 23, 2016 Interview
click here to listen to the full 17 min. interview | | |
Valuation Commentary: Metanor Resources Inc. (TSX-V: MTO) (US Listing: MEAOF) (Frankfurt: M3R) is a commercial gold producer at its 100%-owned Bachelor Gold Mill in Quebec. Recently Eric Sprott increased his equity position in MTO.V and for good reason -- the Company is predicting to be cash flow positive, is poised to excel with high-grade (between 6 g/T - 9 g/T) gold Hewfran sourced ore coming online, is building serious new ounces in a new gold system adjacent the mill, and is rapidly advancing toward a scenario that could see it reopen mining its nearby (~65 km SE from the Mill) Barry open-pit as a second front under an improved high-grade model.
Fig 1. (above) Metanor's Barry Pit section view looking north-west, filtered to show high-grade intercepts. The outline of the old pit is seen in green, it was mined to only ~28 m at its deepest point and is essentially ready to go back into service. The present gold corridor is nearly 1 km long with a width of approximately 140m.
MTO.V geologists are working under an updated interpretation of the orientation of the high-grade shoots at the Barry Mine. The old interpretation had two shoots dipping down, they are now viewed as three stacked shoots more horizontal than they are vertical. The old off-orientation interpretation resulted in the mixing of high-grade with low grade, lowering the high-grade and smearing the gold into lower grade, resulting in a lower average grade when estimating and block modeling. Now the geologists are collecting and affirming data under the new model that constrains the envelopes which contain the high-grade, Mining MarketWatch Journal believes this has the potential* to yield in excess of 1 million ounces and better grades than the current near-800K oz resource (in all categories).
Metanor originally mined ore from Barry when it first took the refurbished Bachelor Gold Mill online several years ago, while it was still prepping to access the high-grade underground ore at Bachelor mine, it poured a total of ~45,000 oz gold from Barry sourced ore during that initial interim period. Metanor is currently using consultants, looking at a new potential mining scenario, and has been conducting drilling in the pit with the aim of targeting 2+ g/T gold material. Recent drilling at Barry is yielding affirming results that extend the mineralized zones and validate zones at higher grade in the new mineralisation model proposed by Claude Duplessis, Ing., the qualified person from Goldminds Geoservices (e.g. April 27, 2016 intersecting 5.4 g/T gold over 9m, and May 11, 2016 intersecting 2.1 g/t Au Over 40m). The Barry deposit is essentially ready to go, geologists are pinpointing the high-grade, and within the year it is possible Metanor could be back in operation at Barry. Additionally, Barry sourced ore is not subject to the Sandstorm gold participation agreement.
With a current market capitalization near-$38 million Canadian (429,961,649 shares outstanding X ~9 cents) MTO.V presents a significant opportunity for shareholders as its primary asset, the Bachelor Mill, has a replacement value numerous times the Company's current market cap and is increasingly being viewed as a coveted strategic asset being the only mill within 200km in a gold-rich district.
Metanor is also in the process of adding serious new gold ounces adjacent its mill as it continues to systematically drill to define a new high-grade system in a previously unexplored region (known as the South Zone/Moroy Property) located south of the pluton, only ~900 meters south of the headframe at Bachelor. Drilling in this new area began in earnest following its September 22, 2015 new discovery zone announcement of 10.1 g/T Gold over 26.2 m. Results to date in this new South Zone have been stellar, the new system appears to be huge and to be of higher average grade and thicker structure than the Bachelor/Hewfran sections. New in-hole geophysics reveal high-priority target anomalies of conductors that have correlated well with high-grade gold found to date, and are highly perspective for large gold values Metanor will be targeting in the months ahead; Metanor is near the beginning of a 60,000 m drill program on the Moroy property. Mr. Thibaut Lepouttre, Managing Director at Belgium-based mining and commodity research BVBA firm Caesar published a report in Q1-2016 in which he extrapolates results to date and sees potential* for 1,000,000+ new high-grade ounces from the South Zone.
Fig. 2 (below) Primary asset: 100%-owned Bachelor Gold Mill
Operationally: Metanor's latest gold production figures (for the period ended December 31, 2015 click here to see related release) reveal a Gold producer that is holding its own, successfully executing on cost-cutting measures, and keeping its head above water after stripping out 'depreciation and depletion'; Metanor reported Cash Cost of US$1,008 per ounce sold for the quarter ended. Sustaining cost of US$1,179 per ounce sold for the quarter ended, All-In cost of US$1,305 per ounce sold for the quarter ended, Gold sales for the quarter were 7,476 ounces from gold production of 7,774 ounces. In the quarter MTO.V milled 54,426 tonnes of ore at a feed grade of 4.6 g/T and a recovery of 96.7%. A Total of $10,178,629 Canadian in revenues from gold sales in Q2 at an average sale price of $1,362 Canadain per ounces sold (US$1,022/oz at an exchange rate of US$0.75/CA$1.00).
Forward looking Metanor is expected to excel (cash costs are expected to drop dramatically): The Company is aiming to attain a 40,000+ oz per annum gold production run rate. Sophisticated investors know a mine is not a homogeneous unit; there are lower-grade areas, average-grade areas, and higher-grade areas -- Metanor had been mining sub-5 g/T for the last several months however that is expected to change going forward as the Company is expected to begin (this spring-2016) processing higher grade Hewfran section ore with grades between 6 g/T and 9 g/T and cash costs are expected to drop back down. For the current year, Metanor has stated it expects to produce 40,000+ ounces of gold. 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.
Pouring gold at Bachelor |
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 expected to complete an area substation near-term, afterwich may be the optimum time for Metanor to be positioned to focus on increasing the capacity (Metanor has been waiting for that substation). 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.
Besides improved grades and grade control on tap, it is important to note that Metanor also benefits from foreign exchange, receiving a ~$360/oz price differential (as of May 11, 2016) for gold in Canadian dollars over US dollars).
Metanor currently has two permitted mines:
1) 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). Recent drilling results continue to 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. MTO is able to sell 80% of its Bachelor Mine sourced gold at spot prices with the balance sold to Sandstorm as per gold participation agreement (Note: this arrangement is only on Bachelor-area sourced material, Metanor's mill is a separate asset that is 100%-owned by the Company and the mill may be used to process material sourced from outside Bachelor without restriction (for Metanor's sole-benefit) as long as it meets minimum covenants to Sandstorm -- covenants Metanor has been more than able to satisfy to date).
2) Barry Gold Project, Quebec (located ~65 km from Bachelor): The 100% owned Barry property is neighbor to Oban Mining's Windfall Lake Deposit (formerly owned by Eagle Hill). The resource estimate at Barry now sits at 309,500 oz Gold of Indicated Resources (7,701,000 t at 1.25 g/t Au) and 471,950 oz gold of Inferred Resources (10,411,000 t at 1.41 g/t Au) and is wide open for large resource growth expansion. The current 1km strike at Barry is potentially 13km, there are in excess of 150 anomalies outside the pit area. The Barry deposit is a potential multimillion ounce target; the independent international professional geological firm SGS Geostat has identified Metanor’s Barry deposit as comparable in potential to rival other multi-million ounce deposits such as Canadian Malartic gold deposit (formerly owned by Osisko, now owned by Yamana and Agnico-Eagle) & Detour Gold's Detour deposit. Important to note is that Osisko Gold Royalties has recently orchestrated acquisitions near Metanor's Barry deposit (via Oban Mining).
Metanor is currently studying the possibility of restarting gold mining operations at the Barry Property. Ghislain Morin, President and Chief Executive Officer of Metanor stated: "We feel that the metrics are optimal for a restart of operations at the Barry Pit. Our surface infrastructure is still operational, and the mining permit is still active. Combining this with the current low fuel prices and a gold value of $1,700 per ounce in Canadian dollars, we see restarting as an attractive option for the Company at this time." The technical and management teams at Metanor are extremely competent, having acquired a great deal of experience over the years, and start-up costs are forecast to be relatively low. No processing problems are anticipated, as processing of previous Barry Pit ore was handled by the nearby Bachelor Mine treatment plant, at a maximum of 1,100 tonnes per day.
Other than a 1% royalty (NSR), an additional 2% NSR is payable on metals derived from 13 claims, representing 10% of the property. There are no other obligations arising from production from the Barry open pit.
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Near-term catalyst potential for MTO.V:
- Improved grade control.
- Second mining operation.
- Exploration upside.
- Improved price of gold.
- Potential acquisition/strategic moves.
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Below is expanded insight on some of Metanor's key assets. | | |
Region and Infrastructure
Metanor's Bachelor Gold Mill is the only mill within 200km in a gold-rich district.
The Bachelor Gold Mill complex is the only one within a 100 km radius from Desmaraisville and the possibility exists to either custom mill ore from numerous surrounding gold deposits or acquire additional gold deposits. To the right is a sampling of known smaller gold deposits that warrant attention: |  |
Mining-friendly province: Quebec is unanimously agreed in the mining community to be a stable, mining friendly region and is ranked as a top-tier jurisdiction by the Fraser Institute. Metanor benefits from low hydro-electric costs, is not affected by oil prices, and it has a stable workforce.
Recent news releases regarding Company accomplishments and exploration developments:
• May 11, 2016 "Metanor Intersects 2.1 g/t Au Over 40m and Confirms New Zone to the West of the Existing Pits"
• April 27, 2016 "Metanor Confirms High Grade Extension of Barry Pit Intersects 5.4 G/T Au Over 9m"
• April 20, 2016 "Metanor Confirms the Extension of the Gold Structure at Depth on the Moroy Property"
• April 12, 2016 "Metanor Begins Drilling Campaign to Update the Mineral Resources of the Barry Gold Project"
• March 11, 2016 "Eric Sprott Announces Acquisition of Securities of Metanor Resources Inc."
• March 7, 2016 "Metanor Retains GoldMinds Geoservices Inc. for a Mineral Resources Update on it's Barry Gold Project"
• March 3, 2016 "Metanor Intersects 9.2 g/t Au over 6.4 Metres at the Moroy Project"
• February 26, 2016 "Metanor Reports its Financial and Operational Results for the Quarter Ended December 31st 2015"
• February 23, 2016 "Metanor Starts Drilling the Moroy's New Anomalies"
• February 11, 2016 "Metanor Prepares New Drilling Campaign for the Moroy Zone and Evaluates Resuming Operations at the Barry Open Pit"
• January 21, 2016 "Metanor Intersects 7.5 g/t Au Over 7.2 m at Bachelor Mine"
• January 20, 2016 "Metanor Publishes the Results From the Geophysic Survey on the Moroy Property"
• December 17, 2015 "Metanor Intersects 5.4 g/t Au Over 10.0 Meters on the Moroy Property"
• December 8, 2015 "Metanor Intersects 15.3 g/t Au Over 6.6 Meters"
• December 3, 2015 "Metanor Intersects 6.3 g/t Au Over 4.2 Meters at Bachelor Mine; Confirms Trend Below Level 8"
• November 27, 2015 "Metanor Reports Its Financial and Operational Results for the Quarter Ended September 30th 2015"
• November 19, 2015 "Metanor Resources Inc.: Closing of Second Tranche; $ 842,327 in Private Placement"
• November 11, 2015 "Metanor Intersects 18.9 g/t Au Over 5.6 Meters Near Surface"
• October 30, 2015 "Metanor Increases Drill Program for South Zone and Undertakes Private Placement"
• October 29, 2015 "Metanor Intersects 6.7 g/t Au Over 38.4 Meters Near Surface"
• October 27, 2015 "Metanor Confirms the Discovery of a New Auriferous Corridor Near Surface"
• September 22, 2015 "Metanor Intersects 10.1 g/t Au Over 26.2 Meters Near Surface"
• September 15, 2015 "Metanor Intersects 7.2 g/t Over 8.1 Meters at Bachelor Mine"
• September 2, 2015 "Metanor Completes the Last Payment on Ressource Quebec Loan, and Announces Management Change"
• August 20, 2015 "Metanor Intersects 7.5 g/t Over 15.2 Meters at Bachelor Mine"
• August 6, 2015 "Metanor Intersects 10.2 g/t Over 13.1 Meters at Bachelor Mine"
• July 30, 2015 "Metanor Intersects 12 g/t Over 3.25 Meters at Bachelor Mine"
• July 29, 2015 "Metanor Intersects 11.9 g/t Au Over 11.85 Meters at Bachelor Mine"
• July 17, 2015 "Metanor Produced 10,277 Ounces During Quarter Ended June 30th 2015"
• July 2, 2015 "Metanor Intersects 6.82 g/t Over 8.7 Meters at Bachelor Mine"
• June 30, 2015 "Metanor Intersects 18 g/t Over 1.5 Meters in an Unknown Sector at Bachelor Mine"
• June 25, 2015 "Metanor Intersects 12.8 g/t Over 10.8 Meters At Bachelor Mine"
• June 22, 2015 "Metanor Intersects 22.85 g/T Over 4.04 Meters at Bachelor Mine"
• June 1, 2015 "Metanor Provides Update"
• May 22, 2015 "Metanor Reports its Financial Results for the Quarter Ended March 31, 2015"
• May 14, 2015 "Metanor Intersects 12.24 g/T Over 4 Meters in the Hewfran Sector of the Bachelor Mine"
• April 13, 2015 "Metanor Produced 9,860 Ounces During Quarter Ended March 31st 2015"
• April 9, 2015 "Metanor Reports Larger Intersection With 6.14 g/t Over 15 Meters at Bachelor Mine"
• March 30, 2015 "Metanor Intersects 8.64 g/T Over 5.8 Meters at Bachelor Mine"
• March 27, 2015 "Metanor Resources Inc.: Maturity Date of Debentures Extended 24 Months"
• March 17, 2015 "Metanor Intersects 6.1 g/T Over 6.8 Meters at Bachelor Mine"
• March 12, 2015 "Metanor Resources Inc.: New Gold Corridor at Bachelor Mine"
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1) Bachelor Mine & Mill, Quebec, Canada
100% Owned • Targeting steady-state 4,000+ oz per month run rate at 800 Tonnes Per Day (TPD)
Figure 4. Images captured at Metanor's refurbished Bachelor Gold Mill and Mine (clockwise; the mill, drill result sample assays, two happy visiting shareholders holding two gold bars, ball room, & drilling high-grade ore (centre image)); Metanor originally acquired 100% interest in the Bachelor mine and mill property in 2006 with a plan to refurbish the mill and infrastructure to restart mining (initially MTO used interim mill feed from a remote deposit, pouring ~45,000 oz gold in the process). Bachelor Gold Mine is a past producer from the 1980s having produced 130,341 oz gold in the few years before closing in 1989. The 1989 closing was due to low commodity prices and a less than stellar mining plan that did not follow the mineralized zones closely enough. Now refurbished, redeveloped, and reopened under expert geological supervision, Metanor is processing high-grade underground ore sourced from the ground below the mill again. Metanor's infrastructure is valued (estimated replacement value) at ~CDN$200M, several times greater than its current market cap.
Figure 5. Drifting at Bachelor -- following the higher-grade zones at Bachelor Mine; Bachelor has grades upwards of 26 g/t gold with an average grade of 7.38 g/t gold (fully diluted using long hole) |
The resource at Bachelor
The last resource estimate at Bachelor was from 2005, with ~300,000 oz Au in all categories. Metanor has since been mining from this resource, in-part, and we estimate it has ~half the established resource still to be mined, and more importantly it has conducted drilling to also mine from new material and replace/grow the mine-life -- there is no shortage of gold to keep on producing at Bachelor. 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 near-term. 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). MTO.V has already identified zones at Bachelor that we believe will eventually contribute to extending mine life above 10 years.
The original 2005 Underground Mineral Resource
| | | Bachelor | Hewfran | Total | | Measured | Tonnes | 177,898 | 14,696 | 192,594 | | Grade (g/t) | 8.83 | 8.50 | 8.80 | | Oz of gold | 50,487 | 4,018 | 54,504 | | Indicated | Tonnes | 465,928 | 183,069 | 648,997 | | Grade (g/t) | 7.63 | 7.14 | 7.49 | | Oz of gold | 114,329 | 42,024 | 156,352 | | Total Measured + Indicated | Tonnes | 643,826 | 197,765 | 841,591 | | Grade (g/t) | 7.96 | 7.24 | 7.79 | | Oz of gold | 164,815 | 46,042 | 210,857 | | Inferred | Tonnes | 207,517 | 218,630 | 426,148 | | Grade (g/t) | 6.76 | 6.30 | 6.52 | | Oz of gold | 45,083 | 44,283 | 89,366 |
The original 2005 Underground Mineral Reserves
| | | Bachelor | Hewfran | Total | | Proven | Tonnes | 178,359 | 14,734 | 193,093 | | Grade (g/t) | 8.36 | 8.05 | 8.33 | | Oz of gold | 47,930 | 3,814 | 51,743 | | Probable | Tonnes | 467,135 | 183,543 | 650,679 | | Grade (g/t) | 7.23 | 6.76 | 7.10 | | Oz of gold | 108,538 | 39,895 | 148,433 | | Total Proven-Probable | Tonnes | 645,494 | 198,278 | 843,772 | | Grade (g/t) | 7.54 | 6.86 | 7.38 | | Oz of gold | 156,467 | 43,710 | 200,177 |
Potential to Add Gold Ounces at Bachelor is Strong
Metanor has had recent news of continued quality high-grade intercepts at Bachelor and the adjacent Hewfran section (see below for listing of recent headlines). 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 6. (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. Metnaor is wide open at depth for big exploration potential at Bachelor; the company has deep hole intercepts at ~3,500 ft.
The following is a sampling of recent drill intercepts surrounding Bachelor Mine that will contribute toward extended mine life:
• January 21, 2016 "Metanor Intersects 7.5 g/t Au Over 7.2 m at Bachelor Mine",
• December 3, 2015 "Metanor Intersects 6.3 g/t Au Over 4.2 Meters at Bachelor Mine; Confirms Trend Below Level 8",
• August 6, 2015 "Metanor Intersects 10.2 g/t Over 13.1 Meters at Bachelor Mine",
• July 29, 2015 "Metanor Intersects 11.9 g/t Au Over 11.85 Meters at Bachelor Mine",
• July 2, 2015 "Metanor Intersects 6.82 g/t Over 8.7 Meters at Bachelor Mine",
• June 25, 2015 "Metanor Intersects 12.8 g/t Over 10.8 Meters At Bachelor Mine",
• June 22, 2015 "Metanor Intersects 22.85 g/T Over 4.04 Meters at Bachelor Mine",
• March 20, 2015 "Metanor Intersects 8.64 g/T Over 5.8 Meters at Bachelor Mine",
• May 14, 2015 "Metanor Intersects 12.24 g/T Over 4 Meters in the Hewfran Sector of the Bachelor Mine"
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New South Zone/Moroy High-Grade Gold Deposit Adjacent Bachelor Mill
This September 22, 2015 Metanor announced it has intersected 10.1 g/T Gold over 26.2 meters near-surface (hole M0-15-14) in a new discovery zone not linked to anything previously known, only ~900 meters south of the headframe at Bachelor. This exceptionally stellar high-grade intercept begins at only 6.4 meters depth and has since been systematically followed-up to investigate how it is connected to an earlier drill hole intercept (MO-15-08) at 605 m depth that yielded 26.8 g/T Gold over 1 m -- the results to date have been stellar;
Results to date in the new zone confirm a huge multi vein system and the interpretation to date clearly shows at least one of the structures has an East-West orientation, and a dip near 70 degree to the North -- this explains why anything in the area was never found in old exploration efforts; the main Bachelor Mine veins dip to the South and all historic drilling in the South Zone was mistakenly drilled to the North (parallel, making an intersect impossible). Surface IP geophysics in the South Zone in 2014 told Metanor's exploration team to drill a near-surface anomaly assuming a direct correlation between the percentage of pyrite and the hole grade -- the correlation was a major hit when drilled in 2015, the theory was affirmed (26.8 g/T Gold), the drilling refined to reveal the discovery hole (10.1 g/T Gold over 26.2 meters near-surface), the understanding of orientation was developed, and an in-hole geophysics test was ordered on old holes (the results which were recently released and are extremely exciting)...
New geophysics reveal the best is yet to come:
January 20, 2016 "Metanor Publishes the Results From the Geophysic Survey on the Moroy Property"; In short, anomaly 'C' was drilled and results correlated well, exactly as expected, attention now turns to the two largest anomalies 'A' and 'B' which have never been tested. The most intense anomaly 'A' is located under the tailings pond, Metanor plans to take advantage of the winter conditions to drill it first -- the voluminous size and intensity indicated the gold structure was highly prospective to continue, and that's exactly what was found See April 20, 2016 release entitled "Metanor Confirms the Extension of the Gold Structure at Depth on the Moroy Property":
Figure 7a (above) - Gold Producer Metanor Resources South Zone IP Anomalies and Select Assay Value Intercepts to date.
Figure 7b (above)- Gold Producer Metanor Resources Bachelor Project, location of new discovery zone 10.1 g/T Gold over 26.2 m indicated by red dot.
Moroy - The Next Gold Mine
Figure 7c (above) - South Zone Discovery Moroy Property,
Figure 7d (above) - South Zone Discovery Moroy Property.
Figure 7e (above) - South Zone Discovery Moroy Property
This new discovery gold zone corridor fits well into the future expansion plans for Metanor; being only ~900 m from the headframe, the Company may decide to build a ramp into the near-surface high-grade that starts only 6.4 m depth and maybe build a conveyor over to the mill, or maybe build a drift over from Bachelor to reach material at depth -- many options exist depending on how big this gets. Additionally it is anticipated that for only few million in capex Metanor could increase the milling capacity to accommodate a second front and facilitate output that could possibly yield 80,000 to possibly 100,000 ounces Gold per annum from the Bachelor Mill, the increase in scale would also translate toward lowering cash costs.
Figure 7f (above) - Conceptual Development - Click image above to see live 3D animation
Mining analyst sees potential for 1,000,000+ new gold ounces from the Moroy South Zones
Mr. Thibaut Lepouttre, Managing Director at Belgium-based mining and commodity research BVBA firm Caesar published a report in February 2016 in which he extrapolates results to date and sees potential* for 1,000,000+ new high-grade ounces from the South Zone:
Excerpt:
| The discovery hole was already very interesting (with an intercept of almost 6 meters at 10 g/t gold) in hole 15-14, but we weren’t too excited just yet. And then we talked to the company’s management team at the past Cambridge House show in Vancouver. Metanor now has an exploration target of 500 meters by 570 meters (and the most aggressive expectations are now pointing in the direction of a 500 X 700 meter zone of interest), and is assuming an average width of 4 meters.
That’s roughly in line with the first exploration results at Moroy which returned for instance 6.6 meters (true width: 3.6 meters) of almost half an ounce (!) of gold per tonne of rock, as well as 10 meters at 5.4 g/t (with a true width of 8 meters!). These exploration results are very intriguing and as the higher grade mineralization seems to be starting close to surface, Metanor could still upgrade the current exploration target as the Moroy mineralization could be more widespread than originally thought.
If we would now base a rough exploration target based on a 500 X 600 X 4 meter target zone, this zone would contain 1.2 million cubic meters of ore. Using a density of 2.65 tonnes per cubic meter, we are talking about an exploration target of 3.2 million tonnes of rock. It’s of course way too early to discuss numbers, but if Moroy would have an average grade of 6 g/t, these 3.18M tonnes of rock would contain almost 600,000 ounces of gold.
Should the internal target of 500 X 700 meters be realized, this exploration target would increase to in excess of 700,000 ounces of gold. We compiled a table with different tonnages as well as average grades to give you a better idea of how sensitive the total amount of ounces is versus the total tonnage and average grade.
 click here for full copy of the report.
* Estimates of potential made by the mining analyst are non 43-101 and not from the Company. |
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2) Barry Deposit & Property, Quebec, Canada - 100% Owned, located ~65km southeast of the Bachelor Lake Mine/Mill
SGS Geostat Issues NI 43-101 Resource Estimate Report Identifying Metanor’s Barry Deposit as Comparable in Potential to Rival Other Major Gold Deposits Such as the Canadian Malartic (formerly Osisko) and Detour Gold's Detour Deposit
The independent international professional geological firm SGS Geostat has issued (November 2010) its NI 43-101 Technical Report Mineral Resource Estimation on Metanor Resources' Barry Deposit property detailing the sizable resource and providing new revealing commentary, comparing Metanor’s Barry deposit in potential to Canadian Malartic deposit and Detour Gold’s Detour deposit.
The Barry resource estimate now sits at 309,500 oz Gold of Indicated Resources (7,701,000 t at 1.25 g/t Au) and 471,950 oz gold of Inferred Resources (10,411,000 t at 1.41 g/t Au) – by all measures a technical success. However, it is the opinion expressed by SGS Geostat that speaks volume to the large inherent value of the asset and resource growth potential that should translate to a market success for shareholders of MTO.V as it is now evident the Barry gold property holds enormous potential to dwarf its Bachelor Lake mine and mill operation.
The following excerpts are from SGS Geostat’s summary section found in the 43-101 Barry resource estimate technical report:
Barry Technical Report [9.4MB PDF] | “…the exploration and development work at Barry has significantly increased the amount of resources. The mineralisation is open in all directions and the property has not been drilled out to its full extent. … In the context of larger tonnage with lower grade with an onsite mill, the property has the potential to become a significant low grade high tonnage deposit similar to the Aurizon (Joanna), Osisko (Malartic) and Detour Gold (Detour) deposits. The gold is in the system, the mineralized fluids have circulated in the major shear. Additional exploration and geological work are required to increase level of knowledge of the mineralization system to better define the high grade zone behaviour in addition to development of additional resources laterally in junction to the latest geophysical survey.”
“The Barry project geology has the potential to become an important gold deposit and SGS Geostat recommends the continuation of the development of the Barry project. SGS recommends continuation of exploration and development on the Property.”
Source: SGS Geostat's technical report on Metanor's Barry deposit |
Full copy of the 121 page 43-101 technical report is available here and is also filed on SEDAR. Mining MarketWatch Journal notes the comparable deposits mentioned by SGS Geostat that Barry appears to have the potential to rival are sizeable and growing;
News Regarding the restart of mining at the Barry Deposit:
February 11, 2016 "Metanor Evaluates Resuming Operations at the Barry Open Pit";
Synopsis of News:
Metanor is studying the possibility of restarting gold mining operations at the Company's open pit on its 100% owned Barry Property.
Ghislain Morin, President and Chief Executive Officer of Metanor stated: "We feel that the metrics are optimal for a restart of operations at the Barry Pit. Our surface infrastructure is still operational, and the mining permit is still active. Combining this with the current low fuel prices and a gold value of $1,700 per ounce in Canadian dollars, we see restarting as an attractive option for the Company at this time."
The technical and management teams at Metanor are extremely competent, having acquired a great deal of experience over the years, and start-up costs are forecast to be relatively low. No processing problems are anticipated, as processing of previous Barry Pit ore was handled by the nearby Bachelor Mine treatment plant, at a maximum of 1,100 tonnes per day.
Other than a 1% royalty (NSR), an additional 2% NSR is payable on metals derived from 13 claims, representing 10% of the property. There are no other obligations arising from production from the Barry open pit. |
Excerpt from news release regarding recent drilling at the Barry Deposit:
April 27, 2016 "Metanor Confirms High Grade Extension of Barry Pit Intersects 5.4 G/T Au Over 9m";
VAL-D'OR, QUBEC--(Marketwired - April 27, 2016) - Metanor Resources Inc. (« Metanor ») (TSX VENTURE:MTO) is pleased to announce the preliminary drilling results from the 1,200 m diamond drilling campaign at the Barry property, located 116 km from the Bachelor mill.
The drilling program at Barry aimed to test the extension of high grade mineralization and the new mineralization model proposed by GoldMinds Geoservices Qualified Person (QP), Claude Duplessis P.Eng. The drill program is almost completed.
Previous modeling of the mineralization and estimation of resources was done under the basis that mineralization was striking North-East and dipping South East. Goldminds' analysis of the high grade mineralization using GENESIS © software has allowed the visualisation of 3 stacked oreshoots plunging East at 19 degrees over 225m strike length (open) inclined to the south at 49 degrees, these high grade zones are about 55-60m wide (25-30m true thickness-see figure attached) These high grade zones are located to the west and connect the west pit and the center pit in the East direction.
This trend was also tested in other sectors and Hole MB-16-14 located to the extreme East of the Main Pit demonstrates continuity of high grade mineralisation in that direction. Hole MB-16-07 located in the west outside the pit area has also shown mineralization of interest and is in line with limited surrounding holes. This will require additional drilling to define a possible new zone to the West.
Preliminary highlights of the program at Barry - Partial results (only holes 06, 07, are completed)
| Hole Number | from (m) | to (m) | Length(*) | grade Au (g/t) | | MB-16-04 | 1.6 | 6 | 4.4 | 2.1 | | MB-16-04 | 17 | 27 | 10 | 2.5 | | MB-16-06 | 28 | 58 | 30 | 1.8 | | including | 28 | 41 | 13 | 3.6 | | MB-16-07 | 58 | 78 | 20 | 0.8 | | MB-16-14 | 52 | 61 | 9 | 5.4 | (*) Core length
Included maps:
1) Location map of the drilling program
[Editors Note: The image above shows the location of the drill holes released April 27, 2016. drill hole 7 seen in the upper right hit 5.4 G/T Au Over 9m, extending the main pit. Drill hole 14 (seen at the bottom left) appears to have intersected part of the third stacked zone which is theorized to carry up to surface, ~500 m into the trees, off to the left where an old channel sample intersected interesting grades.]
2) Section with high grade mineralization trend
3) Typical high grade mineralization
...click here for full copy of release from source
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Figure 9 & 10. Barry core and Oxidized Mineralization in the Main E-W Shear Zone. With Coarse to Fine Grained Pyrite Boxwork |
Figure 11. Barry Deposit - Old interpretation of zones. The old interpretation had two shoots dipping down, they are now viewed as three stacked shoots more horizontal than they are are vertical. | "The gold is in the system, the mineralized fluids have circulated in the major shear" -- Those are the words SGS Geostat is using to describe Metanor's Barry project and is what investors in junior mining should be on the lookout for -- the key for a highly successful exploration company is to find a structure that carries gold and then with that the company can use it as building blocks. Now that Metanor knows it has the structure supporting gold it only has to follow it like it did with the initial 35,000 ounce deposit MTO.V originally bought from Murgor; Murgor hit a dyke and essentially stopped but MTO.V discovered the structure dipped 150m and popped back up on the other side, joining it up to the west zone. The gold system is now understood to be there and understood to be very large. SGS describes the deposit as "open in all directions and has not been drilled to the fullest extent" -- Metanor went from 35,000 ounces Gold to ~781,000 ounces Gold (in all categories) with only minimal drilling of 20,000 metres.
Figure 12. Barry Deposit -- Metanor has encountered quality intercepts (e.g. 9.24g/t gold over 33m, 6.12g/t over 37.8m). Figures/images depicting the Barry deposit above show numerous drill holes to ~100m, however the drill intercepts at 400m - 450m are very telling as it is important to remember that area miners such as Aur Resources (now Teck Cominco), Agnico-Eagle and Sigma are currently mining at depths of between 5,000 and 10,000 feet – the Barry deposit has the potential, like the gold grade at their Bachelor property, to increases at depth and the strike is open in directions. It is very common in this region for the grades to increase at depth and with the values Barry is intersecting near surface, it is clear the Barry open pit deposit has enormous inherent value.
Neighbors to watch:
The gold system amongst a handful of players is part of a new mining camp in the Barry-Urban township of Quebec:
Oban Mining Corporation's Windfall Property (formerly Eagle Hill) TSX: OBM: In April 2015 Eagle Hill published the results of a Preliminary Economic Assessment (“PEA”) for the Windfall Lake Project. The PEA outlines the design of a 1,200 tonne per day underground mine producing 106,200 ounces of payable gold annually for 7.8 years at an average total cash cost of $558/oz of gold (US$480/oz). At a base case gold price of US$1,200/oz the project has a pre-tax internal rate of return (“IRR”) of 23.6% and a pre-tax net present value discounted at 5% (“NPV5”) of $241.4 million. Initial project capital costs are estimated at $240.6 million. Eagle Hill intended to complete a pre-feasibility study for the Windfall Lake project by 2017, it is unlear if that is still the plan under Oban. Oban is currently (as of January-2016) drilling to expand the resource and is also conducting in-fill drilling. The current mineral resource is estimated at 2,762,000 tonnes grading 8.42 g/t gold for 748,000 ounces in the indicated category, and 3,512,000 tonnes grading 7.62 g/t gold for 860,000 ounces in the inferred category. 1 High-grade mineralization has been identified in multiple zones, yet only a small portion of the 12,400 hectare property has been tested to date. Mineralization has been identified only 30 metres from surface in some areas and as deep as 870 metres in others, with significant potential to extend mineralization along strike and at depth. Many gold deposits in this region continue well below 1,000 metres depth.
Bonterra Resources (neighbor to Oban's Windfall Property and Metanor's Barry Property) TSX-V: BTR: Bonterra Resources was not part of the Oban deal, however it was the recipient of funds from Oban to advance the Gladiator Project (formerly known as their Eastern Extension Project). To date the Inferred resource on th project sits at 273,000 Oz @ 9.23 g/t gold, plus it has high-grade visible gold (up to 220 g/Mt Gold). Significant drilling has been performed since the last resource. Bonterra is currently drilling to expand the resource.
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Details of Metanor Resources Barry Resource
The Gold resources above 0.5 g/t for the Barry deposit were re-evaluated by SGS Geostat in compliance with NI 43-101 and are now estimated at:
309,500 oz Au of Indicated Resources (7,701,000 t at 1.25 g/t Au)
471,950 oz Au of Inferred Resources (10,411,000 t at 1.41 g/t Au)
These resources were calculated for the Main, West, 43 and 45 mineralized zones which are included in a wide north-east striking deformation corridor. This resource re-evaluation is incorporating all recent drill results performed by Metanor in 2008-2009 (245 ddh's totalling 29,075m) and allowed to extend the mineralized zones almost 1,3km in a southwest and northeast direction. The mineralized corridor is open laterally and at depth. This resource re-evaluation was performed with a 0.5 g/t Au Cut-off and using the inverse distance method. High values were cut to 35 g/t Au and a fixed density of 2.8 g/cm was used for this calculation. A major portion of the resources are at, or near surface and are considered open-pitable, thereby reducing operating costs significantly. A study also confirmed the non-acid generating nature of the host and mineralized rock at Barry (Bodycote Material Testing).
An induced polarization (IP) survey executed by Abitibi Geophysique of Val d'Or in 2009 localized strong anomalies similar to those associated the main zone approximately 1.5km to the southwest of the west extremity of the pit and approximately 2.2km to the northeast of the east extremity of the pit. Extensions of mineralized zones were intersected in diamond drill holes at a vertical depth of 450m and are still open at depth. IP anomalies also demonstrated the potential of extending gold bearing zones of the Barry deposit to a minimum distance of 8.5km and the potential of considerably increasing the resources during future diamond drilling programs.
Figure 13. Barry Open Pit This image shows how the east pit meets the west pit. The Barry Deposit is growing width wise and length wise. Numerous forestry roads link Barry to the Bachelor mill (~65km distance away), facilitating material transport.
Drilling highlights from the previous 20,000m drilling program at Barry:
January 13, 2010 =
January 7, 2010 =
September 24, 2009 =
June 11, 2009 =
April 14, 2009 =
April 14, 2009 =
September 18, 2008 = | 3.42 g/t over 22.4 m
3.49 g/t over 45.6 m
9.24 g/t over 33.0 m
10.4 g/t over 7.65 m
48.9 g/t or 5.19 g/t (cut to 34.28 g/t) over 12.27 m
4.86 g/t over 27.0 m
6.12 g/t over 37.8 m | |
Figure 14. (Above) Barry Open Pit - 1 km Strike Length
Figure 15. Barry Open Pit (Above) - Further Potential The recent resource estimate is basically calculated at 100m depth, however it is clearly open at depth, they have intercepts at 450m down, it runs more than 1km in length located in the center of a 15km long property, a Diagnos study pegs the current 1km strike at Barry as potentially 13km; Metanor has documented over 150 anomalies outside the pit on the property.
The present gold corridor is nearly 1 km long with a width of approximately 140 m and up to depths ranging from 75m to 125m. The Barry pit is still open in all directions.
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Other noteworthy holding projects in Metanor's portfolio
Dubuisson (100% owned) and Nelligan (70% owned) Properties: Metanor also has several other properties of significance including their Dubuisson property which precipitated MTO becoming a publicly traded entity in 2003. The Dubuisson property lies within the city limits of Val-d'Or, Quebec, where 9,000 m of exploratory drilling has confirmed a measured, indicated, and inferred resource of over 450,000 ounces of NI 43-101 compliant gold. The Nelligan property, which consists of 58 claims totaling approximately 2895 ha located immediately to the west of the Bachelor property and approximately 8 kilometers southwest of the Town of Desmaraisville and has turned up significant results and new gold bearing zones of significance have been discovered. Nelligan is in close proximity to the Bachelor Lake Mill. Sheared and mineralized horizons at Nelligan similar to the Vein A at the Bachelor Mine were exposed on the Billy group and the Valley group of Nelligan property. On the Billy group, assay values of 582 g/t Au over 0.53m and 3.15 g/t Au over 3.0m were obtained from channel sampling. On the Valley group, the best assay result was obtained from a grab sample of altered mafic volcanic with minor pyrite stringers and quartz veining and returning 3.25 g/t Au. Values obtained in channel samples demonstrate continuity of gold mineralization across the shear zone with grades of 2.02 g/t Au over 2.10m and 1.47 g/t Au over 2.25m.
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Metanor's Key Technical Leadership and Management Skip to top
The current management team and board of directors has a well rounded combination of people that each contribute expertise in disciplines necessary for a successful mining entity:
Serge Roy, Executive Chairman, Director
Before founding Metanor he was President of Ressources Pyrinor inc. He is a residential and commercial construction contractor. Previously, he has held various positions with companies, such as Construction G.P.M., Stabell Resources Inc. and Ovaltex Consultant inc. (mining consultants and geological engineers). Mr. Roy holds a construction contractor’s licence from the Commission de la Construction du Quebec.
Ghislain Morin, President, CEO, Director
Mr. Morin participated in many feasibility studies with a view to implementation of mines, mining projects and mining product installation companies. Between 1981 and 1989, he founded quipement Minier GRM Inc. for which he is now vice president. Mr. Morin has been involved in planning, management, monitoring, construction and evaluation of various mining projects since 1974.
Ronald S. Perry, Vice President, Treasurer, Director
Mr. Perry has almost 30 years of accounting, financial and entrepreneurial business experience in high technology, venture capital and merchant banking companies. Since the year 2000, Mr. Perry has been the Founder and President of Briolijor Corporation, a financial consulting company to both private and public corporations. Mr. Perry has been involved in all facets of business including statutory reporting, internal controls, legal aspects as well as all administrative responsibilities.
Andre Tremblay, VP of Exploration
Mr. Tremblay has more than 30 years of experience in mining exploration. He holds an bachelor’s degree in geological engineering and a masters’ degree in earth sciences (structure) from the Universite du Quebec in Chicoutimi. He’s acted as a director of exploration and/or various senior geologist positions with companies (as Ressources minieres Coleraine, GeoNova Explorations, Gestion S.R.C. Inc., Groupe Minier O, Mines Camchib, Campbell Resources Inc.) in Abitibi and the Chibougamau area.
Pascal Hamelin, VP of Operations
Mr Hamelin, holder of a Mining Engineering Degree decreed by the Ecole Polytechnique of Montreal, is member of the Ordre des Ingnieurs du Qubec (since September 2009) and of the Professional Engineer of Ontario (since July 1993). Mr Hamelin cumulates nearly 20 years of progressive and relevant experience in mining operation project management and of surface and underground mining operations. This experience was acquired (from March 1991 to October 2007) mainly in the Stoble, McCreedy East, Copper Cliff North and Garson Mines belonging to the Inco Company. Mr Hamelin was Mine Manager of the Mine Lamaque from October 2007 to May 2009. Then, he worked as Mine Manager for the Lake Pelletier project (Rouyn-Noranda) and Lake Herbin Mine (Val-d'Or) of Alexis Minerals Corp. (May 2009 to September 2010). During his career, Mr Hamelin also performed and completed several mining prefeasibility and feasibility studies.
Norman Parker, General Manager of operations at Bachelor/Barry
Mr. Imbeault has over 30 years of experience in the mining industry. His education and experience are all elements that will contribute to the company's success. During the last five years, Mr. Parker was the general manager of the mining contractor Don Bourgeois & Fils.
Note: This article is not intended to be a complete overview of Metanor Resources Inc. or a complete listing of Metanor's projects. Mining MarketWatch urges the reader to contact the subject company and has identified the following sources for information:
For more information contact Metanor Resources' head office at: Ph (819).825.8678
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