Mainly because of the uncertainty. First rule of investing is not to buy companies that are losing money. For some time now MTO has been doing just that.
To me it seems that that situation is about to change. This will happen for several reasons.
1 The price of gold has gone up in the last 2 years and the price of the canadian dollar has dropped.
2.Last year MTO was mining very low grade ore. Dilution was 40% This year the grade is much better as theyare sourcing ore from the Hewfran.
3. MTO has been depreciating their assets as they have been mining. It appears as if they will run out of ore within the next 18 months if and that is a very big IF you were to only take your reckoning from the 2011 43-101. MTO in reality has been doing a good job exploring for replacement ore bodies as the drilling results below clearly shows. The grades shown are quite good. The distance from their present workstations to these new ore bodies is quite close. IF they had an up to date 43-101 MTO would be showing much improved profitability solely because their depreciation would drop, substantially.
4. The Barry open pit will be a profitable operation at the present gold price levels. Payback on this claim is very quick. If the price of gold increases even lower grade ore can be mined and trucked profitably to the Bachelor mill.
Recently released drilling results. These you can see are good quality.
| Hole No. | from
(m) | to
(m) | length
(m)* | Grade Au
(g/t) | Zone |
| 14-172 | 84.5 | 87.7 | 3.2 | 4.6 | 16-00-03 |
| 14-172 | 103.7 | 105.2 | 1.5 | 3.6 |
| 14-173 | 89.0 | 91.5 | 2.4 | 4.4 |
| 14-174 | 91.2 | 95.9 | 4.6 | 6.6 |
| 14-175 | 68.9 | 71.0 | 2.1 | 15.0 |
| 14-175 | 80.2 | 87.8 | 7.6 | 9.6 |
| | | | | | |
| 14-176 | 78.7 | 82.3 | 3.6 | 11.9 | 16-00-01 |
| 14-177 | 72.4 | 76.2 | 3.8 | 6.2 |
| 14-178 | 62.6 | 64.7 | 2.2 | 8.6 |
| | (*) Core length
|