Metanor Resources nets 25% more gold from bulk sample at Barry project

A bulk sample of more than 50,000 metric tons has yielded 25% more gold for Metanor Resources (MTO-V) than the company’s original estimate.

Since January, Metanor’s Barry project in Quebec has dispatched 53,901 metric tons of mill-feed to its refurbished Bachelor mill at a grade of 5.23 grams gold per tonne. With an average recovery of 84.6%, Metanor has recovered 7,655 oz. gold.

At a cut-off grade of 2 grams gold per tonne, the deposit’s 43, 45 and main zones together have a National Instrument 43-101 resource estimate of 385,000 tonnes grading 4.23 grams gold per tonne for 52,300 oz. gold in the indicated category and 966,000 tonnes grading 4.07 grams gold per tonne for 126,600 oz. gold in the inferred category.

A large part of the resources are at or near surface and are considered open-pittable, the company says.

Recoveries at the Bachelor mill are about 92%, but the company says it plans to raise that to 96% in the coming weeks.

The Canadian junior says the Barry project will move into commercial production shortly.

The deposit is in the Urban-Barry greenstone belt, about 65 km southeast of the Bachelor Lake mine.

Cash flows generated from Barry will help complete the underground development and exploration program for the Bachelor property.

“We spent maybe $15-20 million on refurbishing the mill,” says Andre Tremblay, Metanor’s exploration manager. “To build a new one today it would cost more than $100 million and perhaps even $150 million depending on where you are.”

Metanor plans to bring the past producing Bachelor mine back into production after it deepens the shaft. In the meantime, the Barry deposit will feed its mill.

The news sent Metanor up 4 a share, or 5.1%, to 82 apiece, on a volume of 322,550.

Over the last year, the Val d’Or-headquartered junior has traded in a 50-$1.20 per share band and has 72.5 million shares outstanding.

Madison Avenue Research Group likes the stock and notes that it is not often that a new gold mine comes on stream in a stable jurisdiction.

In a July 8th note posted on www.kitco.com, the research group points out that Metanor is “extremely undervalued” and that its gold milling facility and infrastructure alone is worth about US$140 millionwell above the company’s current market cap.

“The current market capitalization of Metanor is well below the replacement value of their infrastructure alone, ignoring their more than 1 million oz. gold resource, significant exploration potential and substantial revenue projections,” it states.

“There should be no further share dilution or any bank financing in Metanor’s futurethe math of a 1,200 tonne per day (65,000 oz gold per annum) operation dictates there should be no lack of funds available to grow and reward shareholders accordingly.”