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New York, NY, United States, 2007/11/09 - Research Group Updates 2007/2008 Gold Forecast with US$850/Oz as Next Psychological Barrier to Be Smashed and Bullish Valuation Commentary on Near-Term Gold Producer Metanor Resources as Metanor prepares for gold production.
Madison Avenue Research Group has revised commentary to the report that explored a global gold mining supply side predicament, offering a 2008 gold price forecast review and Upside Valuation/Summary on Metanor Resources Inc. (TSX-V: MTO) (OTCBB: MEAOF).
The Addendum report/update may be viewed free of charge online.
Excerpts from report:
1) Our old bullish 2008 gold forecast commentary from Oct.16, 2007:
Madison Avenue Research Group's outlook for gold as articulated seven months ago (March 6, 2007) remains extremely bullish. Our sentiments at the time were shared with Louise Yamada, managing director of Yamada Technical Research Advisors LLC in New York, former head of technical research at Citigroup. Yamada saw (and correctly so) gold surpassing US$730 on its way to US$3,000 within a decade. "Gold is the purest play against the dollar,'' said Louise Yamada. Yamada is highly respected and was was voted Wall Street’s best technical analyst from 2001 to 2004. ...
Our updated commentary on happenings as of November 9, 2007:
The psychological level of $850 is our next target as it is the record peak struck in January 1980. Gold rallied to a 28-year high of $845.40 an ounce on Wednesday (Nov 7, 2007). Investors seem keen to drive the metal to a record high as the dollar continues to tumble to an all-time low against the Euro and oil continues to rally. Gold is a safe haven with credit markets in turmoil and the health of the U.S. economy in doubt. A downbeat economic forecast by Federal Reserve Chairman Ben Bernanke has added fuel to the fire this week.
Looking forward, Madison Avenue Research believes that gold is technically overbought now and profit-taking pressure should grow, but funds will flow into gold on weakness because gold has been performing extremely well and the psychological $850 barrier should be taken in the near-term; the powerful bearish momentum on the US dollar is driven by fundamentals, technicals, and psychology – a difficult combination to reverse trend on.
2) For those not familiar with the story, time to pay attention is now as in Q4 2007 Metanor Resources will commence gold production, pouring their first gold bar. Metanor will become a gold producer at their 100% owned Bachelor Lake Gold Mill in the prolific Abitibi mining District of Quebec. With the refurbishment of Metanor’s 1000 tonne capacity per day mill, initial mill output from the Q4 test batch is ready. Production next year should accelerate to 45K oz in 2008, ramping up to 65K oz in 2009. The mill is configured to produce dore bars of approximately 90% gold, with a small component of silver. MTO.V appears to offer exceptional opportunity; their 2008 and onwards EPS will likely be very significant as a debt free unhedged gold producer. The current market cap relative to expected revenues is disproportionate (analysts report pegs $3 per share price). With plans to readily upgrade the resource base from over 500,000 oz of gold to over 1,000,000 oz, with approximately 60M shares outstanding and currently trading under CDN$1/share, the present valuation of MTO.V provides exceptional opportunity for investors. ... There should be no further share dilution or bank financing in Metanor's future, as Mining Expert David Bonds put it "they're a pay-as-you go operation with Class A properties on their books". It is not often a new gold mine comes online in a stable jurisdiction, especially offering as much near term operational value and future potential as Metanor. Once the shares that are currently available in its current trading range are absorbed it is likely the stock price of MTO.V will rise significantly. There is just too much going for Metanor and its future prospects, the window of opportunity being made available by shares at the current price level (while still available) are considered by those in-the-know as extremely undervalued with tremendous near-term upside potential.
3) Since our October review Metanor has provided an update (Nov 8, 2007) on operations that confirm restoration of the Bachelor Mill (mechanical and electrical) is 95% completed and the company is progressing towards production, among other insightful points. The Nov 8th release also had a synopsis of considerations that make Metanor a more attractive investment than was previously taken into account in economic studies. Madison Avenue Research notes some interesting points touched on that make Metanor an even more undervalued entity.
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. Reports herein are for information purposes and are not solicitations to buy or sell and of the securities mentioned. Readers are referred to the disclaimer and disclosure section at the bottom of the above referenced URL.