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News Release - October 27, 2011 4:36 PM ET 

 

 

Analyst Issues Upside Price Target on Metanor Resources - 60,000 oz per Annum Gold Production

 

  

NEW YORK, NY, October 27, 2011 /Sector Newswire/ - Metanor Resources Inc. (TSX-V: MTO) (US Listing: MEAOF) (Frankfurt: M3R) is identified in newly issued analysts report by Industrial Alliance Securities with a qualified buy rating and near-term 12 month price target of C$0.95. The report provides an in-depth analysis of Metanor as it enters gold production at its Bachelor Lake Mine and Mill in Quebec.

 

The full Analyst report may be found at http://sectornewswire.com/IASMetanorOct26-2011.pdf online.

 

INVESTMENT THESIS
Metanor, a junior gold exploration company, is poised to transform itself to a gold producer through its wholly owned Bachelor Lake Project and Mill. Metanor is targeting un-hedged 60k oz Au per annum production at times of heightened gold prices with production in 2012 and commercial production to be achieved by early 2013. With gold production and continued exploration potential at nearby properties, Metanor is expected to undergo a serious upward market revision.

 

BACHELOR LAKE PROJECT OVERVIEW
The Bachelor Lake Project is now moving towards production with the shaft expansion completed in Q3 2011 and the development of mine workings well underway.
 

Ownership: The project is wholly owned by Metanor with two applicable NSR capped at $1.75M (sum of both NSR payable by Metanor).
 

Location, Access and Infrastructure: The Bachelor Lake project is located in the Abitibi region, 300km north of Val d’Or and is easily accessible from paved roads linking Val d’Or and Chibougamau. Power is already available at the site.

 
Resource Potential: Bachelor Lake is a mesothermal system with up to 3 veins identified (Main Vein, Vein A and Vein B) with a reserve of 210k oz Au. With the possibility of extending the veins into the adjacent property (Hewfran) and at depth, it is highly likely that Metanor will rapidly expand their previous reserve and resource estimate. We believe that in the short-term (12-18 months), the company could identify up to 400k of mineable ounces of gold (inclusive of previous reserve estimate).
 

CATALYSTS / RESULTS PENDING Bulk Sample: Metanor’s primary catalyst is the completion of a 5,000 tons bulk sample by end of 2011. Exploration: Metanor is hoping to improve the resource and reserve outlined in the prefeasibility report by targeting deeper sections of the deposit and extensions onto adjacent properties.

 
BARRY PROJECT OVERVIEW
Located nearby to the Bachelor Lake Property, the Barry Project could provide the company with strong organic growth. The Project is a low grade bulk tonnage deposit with a resource of 771k oz Au (indicated 7.7M tons at 1.29 g/t Au and inferred 10.3M tons at 1.65 g/t Au). The company is currently exploring various means to process and transport the ore to the Bachelor Lake Mill.

 

RECOMMENDATION
With strong potential for growth and excellent economic factors contributing to the Bachelor Lake Project, we initiate with a Speculative Buy recommendation and a 12 month target of C$0.95. Our target is derived from a NAVPS of our conservative DCF model of Bachelor Lake (5.0%, $1400/oz Au) combined with a 100$/oz in-situ valuation of the wholly owned Barry Project. With the potential to restart operations at Barry and more exploration upside at Bachelor Lake, it is very likely that Metanor could exceed our target price.

 

The full Analyst report may be found at http://sectornewswire.com/IASMetanorOct26-2011.pdf online.

  

 

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