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Metanor Resources (TSX.V - MTO) Strikes a Deal with Sandstorm Resources (TSX.V - SSL) - Video Posted on Investmentpitch.com


February 16, 2011 - London

Vancouver, British Columbia, February 15, 2011. ResourcexInvestor.com's James West discusses Metanor Resources Inc. (TSX.V:MTO, OTCBB:MEAOF). James West figures Metanor just scored a major victory, having inked a deal with Sandstorm Resources (TSX.V:SSL) that sees Sandstorm buying 20% of the gold production from Metanor's Bachelor Lake Gold Project for an upfront payment of CA$20 Million plus ongoing per-ounce payments.

 

InvestmentPitch.com, a multimedia company providing a combined solution for creating, hosting, and distributing video content for public companies, has prepared a video, summarizing this report, which can be viewed here. If this link is not enabled, please visit www.investmentpitch.com and enter "Metanor" in the search bar.

 

According to Metanor's press release:
"Sandstorm will pay $20 million plus ongoing per ounce payments equal to the lesser of US$500 (the "Per Ounce Payments") and the then prevailing market price per ounce of gold. Sandstorm will be making staged payments to Metanor as follows: (i) US$5 million upon signing of the agreement, (ii) US$9 million,once Metanor has achieved certain funding conditions, expected to be completed in the first half of 2011, and (iii) US$6 million on September 1, 2011. Metanor has provided a guarantee that Sandstorm will receive a minimum of US$20 million in pre-tax cash flow over the next six years."

 

While the market did not really react to the news, the capital position of the company is sufficiently improved to allow it to complete preparations for full commercial exploitation of The Bachelor Lake deposit.

 

A Pre-Feasibility Study completed in December 2010 by Stantec Inc. (TSE:STN) outlines an average annual production of 60,000 ounces. The total revenue is projected to be $ 215M, with total unit operating costs projected at $103.45 per tonne. The operating costs have been developed from first principle to determine the underground mining cost. Actual operating activities presently being incurred were used to determine the processing, maintenance, and administration costs.

 

The pre-production capital estimate is $35.4 million, and sustaining capital of $3 million for a total of $38.4 million including a $2.7 million in restoration costs. With the $20 million assured from Sandstorm, Metanor is in an excellent position to achieve the financial goals required to get Bachelor Lake up and running.

 

"We are very pleased with the acquisition of the Bachelor Lake gold stream," stated Nolan Watson, President and Chief Executive Officer of Sandstorm Resources. Mr. Watson continued, "Bachelor Lake gives us further diversification in a low risk geographic area with significant expansion and exploration upside."

 

The Bachelor Lake property is located in the Le Sueur Township (CL740) approximately 225 km northeast of Val-d'Or, via highway 113. Val-d'Or is a major full service centre of mining and economic activity in northwestern Québec

 

The mine site is located 3.5 km southeast of the village of Desmaraisville. The community is serviced by bus and truck transport, and is connected to the provincial power grid and telecommunication systems. A large population of experienced miners and related tradesmen is available within a 240 km radius of the mine (Val-d'Or, Chapais and Chibougamau).

 

Sandstorm Resources is in the business of mine finance and provides an innovative alternative to mining companies in search of capital. Sandstorm completes gold purchase agreements, or gold streaming deals, offering mining companies an up-front cash payment in exchange for a percentage of future gold production. Sandstorm is committed to unlocking upside potential and limiting downside risk.

 

Sandstorm's experienced management team led by Nolan Watson (President & CEO) and David Awram (Executive Vice President of Corporate Development) have a successful track record in the metal streaming business dating back to 2005 with Silver Wheaton (which they helped build into the largest metal streaming company in the world) and more recently with Sandstorm Metals & Energy. Sandstorm Resources intends to grow aggressively and accretively by completing a number of gold purchase agreements with companies in the resource sector.

 

The fact that Sandstorm elected to invest in Metanor is a significant endorsement of the company's business.

 

According to Sandstorm CEO Nolan Watson, "The greatest challenge for us has been finding quality mining assets to invest in. There are countless companies out there looking to raise money, but we do a substantial amount of due diligence to ensure that a deal will benefit both parties in the long term. To overcome this challenge we have added staff so that we are able to sufficiently evaluate the many projects that come across our desks."

 

Out of Metanor's 6 mining projects, there is a total of 1.6 million ounces of gold in all categories of National Instrument 43-101 in 4 of the properties.

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: InvestmentPitch via Thomson Reuters ONE

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