Vancouver, British Columbia, August 25, 2011 - Quebec based Industrial Alliance Securities has issued an updated report for Metanor Resources (TSXV:MTO).
The report, prepared by Mining Analyst Killian Charles, is titled "No Barriers Left to Metanor's Success".
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The report was issued immediately following Metanor's announcement of the completion of the sinking of the mine shaft at the company's Bachelor Lake Mine, located in the historic gold mining region of Abitibi, in Northern Quebec. Work on the shaft started back in the 4th quarter of 2010 and extended the shaft by 536 feet, including the development of 2 shaft stations, on Levels 13 and 14. It was finished on time and on budget, terms not often heard these days.
Its completion is seen by Industrial Alliance as one of the key remaining steps toward restarting commercial product at Bachelor Lake Mine.
Metanor's project team expects to complete the changeover from shaft sinking to lateral development within the week. Lateral development and underground infrastructure construction will begin immediately thereafter.
Work will now begin on installing necessary underground infrastructures in order to serve level 13 and 14 where approximately 40% of the mineable ounces are found, with the balance divided across levels 8 to 12.
Exploration work, aimed at expanding the resource at depth, should be greatly improved with direct and less costly drilling programs. With more than 90% of the equipment on site, Metanor will now proceed toward completing an estimated 5,000 ton bulk sample. This will allow Metanor to begin commissioning the mill as it approaches the start of commercial production. The anticipated positive results will ensure that production begins in 2012.
A 43-101 Technical Report or Pre-Feasibility Study, which was filed on sedar.com in April, outlines an average annual production of 60,000 ounces commencing in July 2012, utilizing only two-thirds of the capacity of the 1,200 tonnes per day mill. Using a gold price of $1,271, and a cash cost of $464, the Study forecast an 85% internal rate of return with a 10 month payback. With the potential to increase the feed to the mill, and with gold now above $1,700, Metanor should be in a position to re-evaluate its projections upwards, and issue even more impressive numbers in the future. Importantly, Metanor has all required permits to enter into commercial production.
The Technical Report gives an estimated 200,000+ ounces of gold in the proven and probable reserve categories and another 80,000+ ounces of gold in the inferred category.
The Industrial Alliance report states that given that the geology and mineralization of the property are well understood, therefore, back-of-the-envelope calculations allow us to estimate the size of the deposit closer to 700,000+ ounces of gold. The current exploration program will initially aim to upgrade the remaining inferred resource to the indicated or measured category.
These new, unofficial estimates would push the current life of the mine past 10 years.
As a result of a gold purchase agreement with Sandstorm Resources, Metanor avoided share dilution and is well-financed to complete construction of the Bachelor Lake Mine. Metanor has already received payments of $14 million, with the final $6 million to be paid on September 1st. Sandstorm will make ongoing payments on a per ounce basis, buying 20% of the gold production for the life of the mine.
The company's second major project is the nearby Barry Open Pit project, which is a near surface gold deposit amenable to open pit extraction.
Industrial Alliance believes Metanor has the ability to produce quickly and capitalize on the gold markets.
For more information on Metanor or a copy of the Industrial Alliance research report please visit their website at www.metanor.ca (http://www.metanor.ca/), or contact Ron Perry at 514-262-8286 or email rperry@metanor.ca (mailto:rperry@metanor.ca).
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