Metanor is now in accelerated ramp-up mode after having successfully completed the bulk sample of its high-grade Bachelor ore which it began last year. The initial ramp-up period for new mines is typically a fluctuating-volume tweaking process; Metanor produced 1,718 ounces of gold in December bringing the total production since the end of July to 7,876 ounces of gold. The ounces produced in December came from working stopes and development ore. The ounces came from 8,534 tons of ore grading 6.47 g/t and the mill is consistently operating at 96-97% recoveries. We anticipate Metanor to produce well in excess of 2000 oz Gold this February via continual steady-state milling and in the process attain cash flow positive operational status. The now ongoing ramp-up toward Metanor's targeted 5000 oz Gold per month (60,000 oz per annum) run rate is expected to be accomplished this 2013 utilizing 2/3 capacity.
MTO is leveraged to the price of gold, able to sell 80% of its Bachelor Mine sourced gold at spot prices with the balance sold to Sandstorm as per gold participation agreement. Fully permitted, fully capitalized, and sufficiently staffed with professional mining personnel able to handle the ramp-up, MTO presents investors with an exceptional opportunity as the first new gold miner in Quebec's Plan Nord.
Operational highlights of this new low cost gold producer include;
• Low geopolitical risk.
• Low hydro-electric costs, not affected by oil prices.
• Targeting 60,000 oz per year production at 800TPD, >96% recoveries.
• Estimated cash cost of ~US$464/oz gold (2011 pre-feasibility by Stantec).
• Identified zones should lead to resource growth and extension of mine life closer to 10+ years;
Metanor's infrastructure is valued (estimated replacement value) at ~CDN$200M. The intrinsic value of Metanor’s known resources (~1.6M oz gold in all categories on all its properties) and infrastructure are several times the company’s current market capitalization. With MTO now entering steady-state gold production and cash flow positive status, this should result in improved market awareness and appreciation for the Company; the reality of the infrastructure and resource value, cash flow growth, and clear ability to add ounces should translate to share price appreciation.