TSX VENTURE EXCHANGE : MTO
VAL-D'OR, QC, Oct. 30 /CNW Telbec/ - Metanor Resources Inc. (MTO: TSX-V)
is pleased to announce the results of a Preliminary Economic Assessment (PEA)
on its Barry and Bachelor Projects located north of Québec, and completed by
Geostat International Inc.
Conclusions and Recommendations
- Following the positive results of the estimated Cash Flow, Geostat is
recommending to the owners to advance the properties in the direction of
a commercial production.
- Geostat also recommends that Metanor should proceeds with a
prefeasibility study in order to confirm the recommendation.
- Before proceeding to the next prefeasibility phase, Geostat recommends
that Metanor should prepare the followings:
At the Barry property
1. Better evaluate the full economic benefit of the treatment of a bulk
2. Define the cost saving resulting from the ore crushing at Barry-1
before sending it to Bachelor. In the Cash Flow no cost reduction has
been applied to that operation.
3. Reassess the economic impact of the royalties, especially those of the
4. Perform additional fill-in drilling to better define the known
5. Explore the surroundings of the proposed open-pit to avoid stockpiling
waste or overburden over possible mineralized areas.
6. Complete the survey of the topography and all the drill holes that
have not already been surveyed in the area of the Barry-1 property.
7. Realize a detailed new description of some of the old drill core to
better understand the correlation between the mineralized envelopes and
the geology of Barry.
8. Continue the exploration around the proposed East Pit and West Zone
where the presence of mineralized zones could add resources to the
The costs of the recommended works at Barry-1 before the pre feasibility
study include Ore definition at the Bulk Sample area, Exploration under
the stockpiling areas, Resources in-fill drilling, General expanding
drilling, Pre-feasibility study and Bulk sample exploitation for a total
At the Bachelor property
1. Proceed to replace the existing hoist.
2. Initiate the shaft deepening to give access to the ore portion that is
below the level twelve.
3. Proceed to the development of the proposed ore undercuts to have a
full understanding of the geology and to assay the mineralized zones.
4. Realize an infill drilling program estimated to 20,000ft.
The total of all these recommended workings before the prefeasibility
study include Hoist & head frame repairs, Shaft sinking with services -
675ft, Excavation of undercuts, In-fill drilling and Prefeasibility study
for a total of $12,490,900.
Mineral Resources Estimate
The resources of the Barry I Main Zone Area (Main Zone, Zones 43 and 45)
gold deposit were estimated by inverse distance composites of 1.5 meters
length. A measured specific gravity of 2.8 g/cm3 is used in this study for all
rock types. Different cut-offs grades of 1, 2, 3, 4 and 5 g/t Au were used for
the resource calculation in various scenarios. Barry I Main Area resources
(Main, 43 and 45), calculated by inverse distance and rounded:
Total resources inverse distance (No cut-off) Rounded
Category Tonnage (mt) Volume (m3) Density Au (g/t) Oz Au
Indicated 415,000 148,000 2.8 4.05 54,000
Inferred 1,102,000 394,000 2.8 3.78 133,800
Bachelor Resources by Geostat
In order to be able to calculate and classify stopes in the indicated and
inferred resources, all the zones listed in the NI43-101 December 2005 report
from InnovExplo were recalculated for this report on East-West longitudinal.
These resources are all in indicated and inferred categories and part of the
resources from Hewfran were not included.
Stopes Thick (ft) Au opt Tonnage (short tons) Au (oz)
Main 12.8 0.202 507,607 102,435
B 21.8 0.219 275,913 60,444
AW 14.7 0.199 136,000 27,000
TOTAL 0.212 919,520 189,878
The total mineralized material at the Barry-1 project appeared to be
economically mineable through the open pit mining method. From the beginning,
the combined East and West pits represented some economical weaknesses on
account of the 1,872,000st (1,698,000mt) of waste that would have to be mined
out to access the 456,500st (414,171mt) of resources at an average grade of
0.149opt (5.10 g/t Au), before dilution. After a tonnage dilution of 20% at a
grade of 0.015 opt (0.5 g/t Au), the average grade to the mill drops to
0.126 opt (4.33 g/t Au). The total waste material to be moved to access the
ore material is increased by 491,000st (445,591mt) when taking the overburden
into consideration. The Barry pit(s) being at near 100km away by road from
milling facilities automatically increases the cost of placing a ton at the
mill site substantially. To decrease the waste and the overburden tonnage to a
more acceptable level while improving the economical viability of the project
a combination of open pitting and one underground mining option was
scrutinized. An eastern open-pit with the following resources is proposed plus
a mechanized open stopes underground exploitation for a high grade portion of
the west zone. An eastern open-pit with the following resources is proposed
plus a mechanized open stopes underground exploitation for a high grade
portion of the west zone.
Tonnage st Au oz/t Au oz Waste/Ore
East Pit: 439,370 0 .120 53,319 2.92
West Pit: 65,868 0.193 12,706
The Bachelor ore is steeply dipping and competent as are both walls
leading to open stopes mining methods. Three underground mining methods are
proposed at Bachelor with the following proportions. These are Long-hole
(52%), Alimak vein mining (38%) and Shrinkage (10%).
Capital Expenditure (CAPEX)
The CAPEX that is applied against the revenues of Barry is the
refurbishing of the mill at 500 tons/day, the increase to 750 tons per day,
the tailing pond studies and rehabilitation and a provision for the
exploitation closure. Barry-1 CAPEX including Mill refurbishing at 500 tons
per day, Mill increase to 750 tons per day, Tailing pond rehabilitation and
Exploitation closure provision is $6,208,000.
Bachelor CAPEX includes Hoist installation, Service building and
Warehouse, Compressors and generators repairs, Shaft sinking, ore & waste
pass, Camp, Level developments (12-13-14-15-16), Equipment acquisition and
Mine closure provision for a total of $18,777,779. The above amount will be
needed over a period of 18 to 24 months depending of the owners' development
schedule. For the Cash Flow estimate the costs are distributed over a period
of 22 months.
A bench-scale test work performed in 2006 on two composites samples of
gold bearing ore at Queen's University in Ontario has returned results
demonstrating that conventional cyanide method provided the highest extraction
of gold yielding results of 94.2% to 97.5%. A copy of the report was
transmitted by Metanor. A two (2) pages document describing the content of
composite sample is produced in Title 15 (Item 18) of the actual report, and
the complete report from Queen's is shown in the appendices of the report. In
the economic study of Barry 1, a recovery of 95% is used for the first four
(4) months and 96% thereafter.
In his concentrator's study M. Gilbert Rousseau is mentioning that a mill
run made at the Lake Short concentrator before the shut down in 1989 reported
recovery of +95%. The mill recovery for the Bachelor ore is assumed to be 96%.
The estimation of the milling costs was done by Gilbert Rousseau eng, a
consultant who was hired by Geostat and visited the concentrator. The cost
estimation for labour, consumables and overhead is $24.97/t for an operation
at 500 tons per day and $20.15/t for an operation at 750 tons per day.
According to Gilbert Rousseau estimation the mill could be operated by
27 employees including the staff.
Mining Operating Costs
East Pit Costs : The excavation costs are from a contractor proposal and
the milling costs are from the estimation done by M. Gilbert Rousseau. The
total east open-pit costs are $26,801,145 to mine a total of 440,000t and
represent $65.16 /t for milling at 500tpd and $60.34/t for milling at 750tpd.
These expenses include overburden removal, waste and ore breaking, crushing of
ore, transportation of ore, ore selectivity, milling and administration.
West Zone costs : The average total cost for underground mining of a
total of 76,000t of ore are $6,995,340 or $92.04/t and include milling at
750tpd and include underground development, ore mining, crushing,
transportation, milling and administration.
The underground mining costs for the method chosen are Long-hole
($61.44/t), Alimak vein mining ($66.65/t) and Shrinkage ($83.10/t). The
average mining costs for all these methods and including stope development,
mining and services costs is $37.51 /t. or mining cots of $66.54/t (with
Economic Analysis Results
The exploitation of the two properties is generating a Net Cash Flow of
$6,502,385 for the expected 73 months of operation. This Cash Flow is shown as
EBITDA, (Estimated Benefit before Interest Tax Depreciation &Amortization), in
other words this is a Pre-Tax Undiscounted Cash Flow. Gross revenue was
estimated using a price of each ounce of gold at $660 CDN.
The situation at the end of this period will leave Metanor Resources Inc
with two properties that most likely will not be exhausted, plus a running
concentrator. It is also important to note that no salvage values have been
given to the assets in the Cash Flow estimate.
Benefit of the Actual Tax Regime
The preliminary Cash Flow has been prepared without any tax credit or
fiscal taxation advantages. In accordance with the Tax credit for resources
documentation of the province of Quebec, both properties could benefit from
the provisions of the actual mining taxation regime. In the case of Barry-1
property, the advantage is related to the tax credit of the cost of the
treatment of a bulk sample needed to better define the metallurgical
characteristics of the ore before going into production. At the Bachelor Lake
Mine property the estimated resources have to be evaluated economically and
technically. A major part of these resources is located below the existing
shat bottom that has to be deepened by 675ft to provide accesses to them.
These development expenses qualify for tax credit.
Geostat reminds that this Preliminary Assessment is preliminary in
nature, that it includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves. This report is
in accordance to National Instrument 43-101.
Yann Camus, Eng. Is the qualified person pursuant to National Instrument
43-101 working for System Geostat International Inc and responsible for the
preparation of the technical report on the Barry 1 property. Gaston Gagnon and
Gilbert Rousseau were the qualified persons responsible of the portion of the
technical report concerning the Bachelor property.
The technical report of the preliminary assessment on Barry-1 and
Bachelor properties is in accordance with NI43-101 and is available since
October 16, 2007 on (www.sedar.com).
Mr. André Tremblay, P Eng. is the qualified person pursuant to National
Instrument 43-101 and supervised the technical information presented in the
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