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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (37499)	5/22/2009 4:47:51 PM
From: LoneClone	Read Replies (1) \| Respond to of 194043

Gold Producer Metanor Resources Inc. Receives Buy Recommendation with Significant Upside Valuation from Northern Securities Analyst Fri May 22, 2:07 PM ca.news.finance.yahoo.com Gold producer Metanor Resources Inc. (TSX VENTURE: MTO.V)(Pink Sheets: MEAOF) is identified in newly issued analysts report by Northern Securities as having significant upside market valuation justification including a ‘speculative buy’ recommendation with a 12-month price target of CDN$1.00. A full copy of the qualified analyst's report is available via at sectornewswire.com Report Highlights: 1) Investment Conclusion: Based on a 1.1× multiple of 7% NAV, we value the shares of Metanor Resources at $1.03 per share. Given our continued belief that the average gold price will remain at or above $750/oz, we are initiating coverage of Metanor Resources Inc. with a SPECULATIVE BUY recommendation and 12-month target price of $1.00 per share. 2) Looking forward twenty-four months, we expect production to ramp-up by 104% (from 2009 production) to ~66,000 ounces at a cash cost of ~US$452/ounce. Given that the grades and thicknesses drilled to date have been notable, we believe we have been conservative in our model. We believe the market has failed to fully appreciate these operational upsides and expect the share price to improve in lockstep with production and cost improvements at the mine over the next twelve months. 3) Adding higher-grade ounces adjacent to existing infrastructure. Systematic drill programs in place to expand/upgrade current resources (~1.0 million ounces of Au). New discoveries open potential for additional mineralization near the Bachelor Mill. 4) Pending catalysts for the stock include: 1) results expected throughout the year from 2008 and ongoing drill programs on three projects; 2) resource updates from Bachelor Lake/Hewfran as well as the Barry deposits by the end of 2009; and 3) Progress reports on (a) the underground development at Bachelor Lake/Hewfran and (b) ramping-up of operating capacity at the Bachelor Mill from ~800 t/d to ~1,200 t/d. 5) Well-financed for aggressive exploration and development/expansion programs in 2009. Approximately $13.0 million in working capital is expected to provide for substantial development of the projects in the next twelve months. The 2009 development/expansion program at the 100% Bachelor Lake Mine and Mill is expected to generate continuous news flow throughout 2009-2010. The following ‘Investment Thesis’ was provided in the report: We believe the solid experience of Metanor’s management team, united with the tremendous exploration potential of its assets, will enable the Company to execute its growth plans and transform into a profitable gold producer. Metanor Resources Inc. is a Canadian-based gold mining and exploration company focused on developing its property portfolio in mining-friendly Quebec. The Company plans to develop the higher grade Bachelor Lake/Hewfran property by mid 2010, to blend the ore with that of currently producing Barry open pit, at its 100% owned Bachelor mill. Metanor is expected to follow-up with its systematic 2008 drill program to expand/upgrade current resources. The Company plans to expand and upgrade current resources (~1.0 million ounces of Au) on its key projects to increase the mine lives as well as delineate additional mineralization by drilling new potential targets. Encouraging results from the 2008 drill programs on the Bachelor Lake/Hewfran as well as the Barry property have resulted in the discovery of new gold bearing zones and expansion of known resources along strike as well as at depth. We believe the success of the 2008 exploration program, amalgamated with the ongoing drill program in 2009, have the potential to increase Metanor’s resources by at least 50% (in the next 12-18 months). Re-rating through operational improvements should boost shares in the next twelve months. The operating team at Metanor is applying its efforts on efficiently ramping up the Bachelor mill, currently running at ~800 t/d, to ~1,200 t/d by Q3-09. The mill is currently being charged with lower-grade ore from the Barry open pit mine and the plan is to blend it with higher-grade (6.0 g/t-7.0 g/t) ore from the Bachelor Lake/Hewfran by mid-2010. For 2009 we estimate the Company will produce ~32,000 ounces of gold at a cash cost of ~US$629/ounce. Looking forward twenty-four months, we expect production to ramp-up by 104% (from 2009 production) to ~66,000 ounces at a cash cost of ~US$452/ounce. Given that the grades and thicknesses drilled to date have been notable, we believe we have been conservative in our model. We believe the market has failed to fully appreciate these operational upsides and expect the share price to improve in lockstep with production and cost improvements at the mine over the next twelve months. Reason to invest in Metanor shares now. Near-term/recurring catalysts for the price of Metanor include results expected throughout the year from 2008 and ongoing drill programs on three projects. Medium-term catalysts consist of: 1) resource updates from Bachelor Lake/Hewfran as well as the Barry deposits by the end of 2009; and 2) Progress reports on (a) the underground development at Bachelor Lake/Hewfran and (b) ramping-up of operating capacity at the Bachelor mill from ~800 t/d to ~1,200 t/d. We are initiating coverage of Metanor Resources Inc. with a SPECULATIVE BUY rating and a 12-month target price of $1.00. The improved production rates, coupled with the updated resource estimates and a favorable outlook on gold equities in 2009-2010, should help Metanor’s shares re-rate higher. We arrive at our 12-month target price by applying a 1.10× multiple to our estimated 7% NAVPS of $0.93, based on a long-term gold price of US$750/oz. This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell and of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure located at the above referenced URL. Contact Information: Fredrick William, Managing Director Market Equities Research Group editor@marketequitiesresearch.com 866.620.9945