By: Tomas Ronolski - AllPennyStocks.com News

Tuesday, August 27, 2013

Gold stocks have been on the climb for about two months after spot gold plunged as low as $1,179 per ounce late in June and began to recover. Through Monday’s close, spot gold was up about 20 percent from those lows, lending optimism to gold producers that had reached grossly oversold conditions. A rise in the resource-heavy TSX-Venture exchange has understandably happened at the same time, climbing about 11.5 percent. Metanor Resources, Inc. (TSX-Venture:MTO) (Pink Sheets:MEAOF), a Val-d’Or, Quebec-based junior gold miner sputtered near lows through the period before shares took flight two weeks ago, surging from 9 cents to close at 22.5 cents on Monday. The company has five properties in its portfolio, including four in Quebec and one in Ontario, but it’s the flagship property of Bachelor Lake that is providing the catalyst for share value recently.

Metanor has been moving steadily towards commercial production at it Bachelor Gold Mine and Mill in Quebec for years with exploration and refurbishments at the project. The underground mine has been shown to host grades in excess of 26 g/t gold with an average grade of 7.38 g/t gold. Since re-opening the mine in July 2012, about 17,500 ounces of gold have been produced. Production currently sits at about 3,000 ounces of gold per month, with the company setting a goal of 80,000 – 90,000 ounces of gold per year in 2015. At current prices, that’s $127.6 million in gold at the high end.

Gold mining in the first half of the year has come from only one or two stopes, with a third access point newly opened, which should lend to greater profitability and better gold in the future as development ore is more costly on a per tonne basis. Once stope ore is the main focus, Metanor expects production to ramp up to as much as 5,000 ounces of gold per month and the declaration of commercial production. The company says it is “comfortable” targeting direct cash costs between $700 and $800 per ounce.

Last Thursday, Metanor said that the latest drilling at Bachelor produced more strong results, including cuts of 11.11 g/t gold over 13.44 meters and 8.04 g/t gold over 7.92 meters. The highest grade in the report showed an intersect of 26.73 g/t gold over 2.94 meters.

On the heels of those findings, the company announced Tuesday morning that it notched a record gold pour of 1,001 ounces in one week at the Bachelor project, perhaps signaling that production is ready to make the next step up to 4,000 ounces of gold per month.

"This weekly record pour confirms that Metanor has the required resources in place and is well on its way towards reaching commercial production," said Ghislain Morin, president and chief executive at Metanor.

Investors are responding favorably to the news that has come in August, after largely ignoring the regular progressions of the company in 2013 as gold and mining equities plunged. The stock price entered the year at 20 cents and collapsed in the second quarter to the aforementioned lows. In recent weeks, volume has grown exponentially in trading of MTO, driving prices higher to put the company up more than 20 percent this year. Perhaps some caution should be exercised given the 160-percent run in nine days, but it looks like Metanor has captured the attention of mining investors. Proper due diligence is, as always, encouraged.

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