TekInvestor’s TekTraders Fundamental Evaluation:
Metals Creek Resources (TSXV: MEK) Q1 2013

March 19, 2013

Business Focus: Gold exploration in politically-safe, world-class gold camps.
Flagship Assets: Ogden Project 50/50 joint venture with Goldcorp featuring 8KM of strike length of the Porcupine-Destor Break including the former Naybob Gold Mine, Timmins Ontario.

Listed TSXV: MEK
Listed OTC: MCREF
Shares Outstanding: 98.5 M
Cash and Marketable Securities (Sept 30 2012): $3,732,428
52-Week High: $0.0165
52-Week Low: $0.04
Price March 18 2013: $0.04
Market Cap: $3.94 million
Telephone: 709 256 6060
MetalsCreek.com

MEK.V 1-Year Chart


TekTrader Advisories is known for timely stock technical updates. But we don’t always build positions based on chart formations, which is why we are buying Metals Creek Resources (TSXV: MEK) right now. While the stock hasn’t bottomed out and built a base, it is trading at the 52-week low of $0.04 cents, and drilling has just begun in one of Canada’s most prolific gold camps. Because of this, we feel a more aggressive accumulation approach is warranted. Metals Creek’s January 15 2013 news of hole TOG 12-07, Thomas Ogden Zone at the Flagship Ogden Gold Project, produced an outstanding intercept of 9.46 g/t Au over 18.55m with visible gold in core. Since the company announced February 26, 2013, approximately 8 pending holes targeting the Thomas Ogden Zone, along strike and in the immediate vicinity – we are choosing not to “wait out” the market for eventual bullish technical signals or a nice U-shaped bottom. Moreover, unlike so many struggling TSXV listed junior explorers today, Metals Creek’s treasury rests at a comfortable $3,547,534 with $184,894 of marketable securities as of last reporting. Given the fact that the Ogden Project is further supported by a 50/50 joint venture funding agreement with industry-heavyweight Goldcorp, we haven’t hesitated to add at these prices.

Flagship Assets Overview:

Metals Creek Resources’ flagship asset and primary focus is the Ogden Gold Project, located in the world-famous and gold-prolific Timmins camp. The property is strategically located between Goldcorp’s Dome Mine and Mill Complex and Lake Shore Gold’s Timmins West Mine. Metals Creek acquired the property in December, 2008. Since then, Metals Creek has made the exploration expenditures and cash and share payments to earn a 50% interest in the property. Metals Creek and Goldcorp (PJV) have now formed a 50/50 joint venture, with final terms consummated July 30, 2012. Metals Creek will be the operator and subsequent programs will be funded on a 50/50 basis while both companies contribute their shares of required funding.

Ogden Gold Project At Timmins Camp


Ogden Project Land Holdings and Infrastructure


Flagship Assets Geological Merits:

The Ogden Project covers 8KM of strike length and is comprised of 4 distinct mineralized gold zones: The Thomas Ogden Zone (TOG), Naybob South & North (proximate to the former Naybob Gold Mine) and Porphyry Hill. Each of these target areas overlays or is immediately adjacent to the Porcupine-Destor Break. Metals Creek has carried out extensive ground and down hole geophysical surveys as well as over 18,000 meters of diamond drilling on all four main mineralized zones.

Ogden Project Zones At The Timmins Gold Trend


It’s no secret that the prolific Porcupine-Destor Break is the key conduit for gold mineralization in the Timmins Camp, with about 70M ounces of gold accounted for from the area to date. Gold production to the east of Metals Creek’s Ogden Project has exceeded 22 million ounces from a number of mines including Goldcorp’s Dome Mine, which has produced nearly 17 million oz and is situated 8KM east along the break. Five additional past producers occur along the Porcupine-Destor Break, between the Ogden Project and the Dome Mine that have seen past production ranging from 920,000 oz to 2,502,000 oz.

The Ogden Project hosts a historic, non 43-101 compliant resource of 1Mt @ 4.12 g/t Au, but it took years of careful work by Wayne Reid (P.Geo, VP Corporate Development & Director) to assemble the 6 patented claims, which now combined, comprise the company’s assets. Because of this, historic drilling on the 8KM portion of the break within Metals Creek’s grounds has been limited to small programs over selected areas, with the majority of work concentrated on the Naybob Mine, which produced 50,731 ounces Au, at the far eastern edge of the property.

In other words, Metals Creek has secured access to the most underexplored grounds in the Timmins Camp, with the most outstanding exploration intercept (9.46 g/t Au over 18.55m with visible gold in core) west of the Dome Mine.

Exploration Highlights By Zone:

Thomas Ogden Zone (TOG) Porphyries


The Thomas Ogden Zone has been traced over 400m on surface, and this anomalous area is open along strike, to the east, west, and at depth. The gold zone is near surface and consists of porphyry-style mineralization with associated pyrite, strong silicification and visible gold, with few sulphides present. Deeper porphyry-style mineralization is present as well with associated arsenopyrite, pyrite and silicification. A second zone of deep gold mineralization is also present at the northern ultramafic contact within the sedimentary rock. Both types of mineralization are open along strike and at depth. The zone features two parallel porphyry units, which are a near necessity in the Timmins Camp – as gold here is typically hosted inside or immediately adjacent to porphyries. In fact, Metals’ Creek land package contains 19 known porphyries.

March 2013 Thomas Ogden Zone Long Section


In 2012, Metals Creek completed 11 diamond drill holes on the Thomas Ogden Zone. Highlights from the 2012 program include 6.08g/t Au over 21.85m including 11.76g/t Au over 9.00m (TOG-12-03) and 9.46g/t Au over 18.55 with visible gold (TOG-12-07), and 1.94g/t over 94 meters (TOG-11-11). Previous drilling at the TOG Zone includes near surface broad intercept of mineralized porphyry 2.20 g/t Au over 75.85m including 5.26g/t over 23.4m, as well as down hole intercepts of 4.37g/t Au over 23.4m from near surface, porphyry style mineralization, and 9.41g/t over 3.28m, which represents one of the deepest high-grade intercepts to date. The TOG Zone has demonstrated excellent potential and no doubt management is highly encouraged by its continued success in defining the geometry and down plunge extension of the gold zone. In further support of this rapidly-building new discovery, the company’s dataset includes historic intercepts 1.51 g/t Au over 21.4m and 1.01 g/t Au over 37.2m within a mineralized porphyry. A summary of the more significant intersections from the TOZ over the past 12 months is detailed in the table below.

Thomas Ogden Zone 2012 Drill Highlights


Naybob South

Naybob South consists of strongly albitized mafic volcanics consisting of 5-30% pyrite and 1-4% arsenopyrite and has a strike length in excess of 300m+ outlined from recent and historic drilling. Near surface drill intercepts from the Naybob South Zone include 9.24g/t Au over 6.61m with visible gold and 5.68g/t Au over 7.0m, which was part of a broader zone of mineralization assaying 4.64g/t Au over 11.0m. Limited drilling has occurred at depth. This zone is currently being evaluated for its near surface gold potential with mineralization within 100m of surface as illustrated from recent drilling. In addition to the outstanding unexplored potential, Naybob South is proximate to the past-producing Naybob mine, with a non 43-101 compliant resource of one million tones grading 4.12g/t Au.

Naybob North

Naybob North was the focus of underground development down to 411M, including 11 levels, with the majority of production taking place within the upper 6 levels. A coincident geophysical anomaly to the east, as well as widely spaced deeper drilling, leaves this target open to future drilling testing the mineralization down plunge.

Porphyry Hill

Porphyry Hill is located approximately 1.5 KM west of Naybob North and exploration was initiated due to 64.4 g/t Au outcrop grab sample. Surface mineralization consists of altered porphyry with associated pyrite and chalcopyrite mineralization. Abundant quartz veining and stock work is present throughout the 425m x 150m porphyry unit. This anomalous area has seen limited drilling of only 4 shallow diamond drill holes approximately 50-70M, one of which ran 6 g/t. Geological work conducted so far suggests alteration is improving at depth. The mineralized porphyry remains open in all directions and was intersected in all four holes.

Near-Term Catalysts & Future Plans:

Metals Creek’s drilling over the past three years has focused on four known gold zones with the most recent drilling concentrating on the Thomas Ogden Zone. Exploration plans announced February 26, 2013 should involve undercutting the exceptional TOG 12-07 approximately 25-30m, and the data strongly suggests gold mineralization is hanging together nicely in the range of 150-175 vertical metres, which is a fraction of the 600m+ depth currently producing gold at Lakeshore’s Timmins West Mine. As of time of writing, drills are turning and results are pending.

Management Highlights:

Alexander (Sandy) Stares, President /CEO & Director

Mr. Alexander (Sandy) Stares has in excess of 17 years experience in mineral exploration, spanning a variety of Canadian geological terranes, from Newfoundland to the Yukon. He has also completed several tours prospecting in Indonesia and Mexico. Prior to forming his own Contracting Company – Stares Prospecting Ltd., as of 2007, Sandy has worked with Rubicon Minerals Corporation, Freewest Resources of Canada, New Millenium, Lac Des Isle Mines, and Noranda. Mr. Stares was instrumental in the discovery of the H-Pond Gold Prospect and the Lost Pond Uranium Prospect. He also discovered numerous major mineral occurrences in Canada and abroad, which have been the subject of extensive exploration programs. Mr. Stares was one of the recipients of the PDAC “Bill Dennis Prospector of the Year” Award in March 2007. Prior to his exploration career, Mr. Stares served in the Canadian Air Force for 15 years and was the recipient of the Deputy Commander in Chief of NORAD “Certificate of Achievement” Award for exceptional performance.

Darin Wagner, Advisor

Mr. Darin Wagner is a Professional Geologist with 20 years of exploration and corporate development experience. Mr. Wagner became President of Sydney Resources Corp., in September 2005 and helped engineered the successful merger between Sydney and Band Ore Resources to form West Timmins Mining Inc. In 2006, he served as President, CEO, Director and Qualified Person for West Timmins Mining through the discovery of the high-grade Thunder Creek Gold Zone in Timmins Ontario and the acquisition of West Timmins by Lake Shore Gold in an all shares deal valued at $424 million. Mr. Wagner currently is President, CEO & Director of Balmoral Resources, also serves as a director of Druk Capital Partners and as a technical and/or corporate advisor to several other publically listed resources. Darin’s West Timmins project, located 6KM west of Metals Creek’s Thomas Ogden Zone began with discovery results of 12 ¾ g/t Au over 80m, which ultimately led up to the takeout by Lakeshore Gold.

Richard Nemis, Advisor

Mr. Richard Nemis is a graduate of St. Charles College, Sudbury, Ontario, University of Ottawa and Osgoode Hall Law School. He was called to the bar in the Province of Ontario as Barrister and Solicitor in 1968. Richard practiced law in the field of corporate, commercial and securities law continuously until approximately 1995. From 1980 to 2008, Mr. Nemis served as the President and CEO of Noront Resources Ltd. In 2008 Mr. Nemis was named Chairman Emeritus of Noront for life in recognition of his outstanding pivotal contributions to that company’s success, which included the discovery of “The Ring of Fire” McFaulds Lake area, north eastern Ontario. During his tenure with Noront, Noront funded the exploration and discovery of the Beaver Brook Antimony Mine, Gander, Newfoundland. Mr. Nemis established Central Crude Ltd. which subsequently was changed to River Gold Mines Inc. and currently trading on the TSX. While President and CEO of Central Crude, the company discovered and developed the Eagle River Gold Mine, Wawa, Ontario which is currently in production. Also during President of Central Crude, the company was associated with the Moss Lake Deposit located west of Thunder Bay, Ontario. Also during Presidency of Central Crude, was instrumental of a large oil and gas field in Ohio USA located in the Cleveland area and known as the Geauga County Gas Field. Mr. Nemis was associated with Mr. V.N. Harbinson and associated with a number of the Harbinson group of companies, including Consolidated Durham Mines, Spooner Mines and Oils and Dominion Explorers, Noble Mines and Oils, Onaping Resources. Mr. Nemis is currently a senior member and part owner of what is considered to be the largest structural steel fabricator in northern Ontario, operating since 1946 out of Sudbury, Ontario.

Summary & Investment Case

There’s no doubt the current (but increasingly long-in-the-tooth) bear market in junior resources stocks makes it exceptionally difficult for exploration companies to fund flagship projects – many companies are simply struggling to survive.

With Metals Creek’s healthy treasury, 50/50 cost sharing JV with neighbor (and Dome Mine and Mill operator) Goldcorp, and decent-sized liquid float, we haven’t hesitated to add at these prices – we consider it a great trade in the making. However, what really won us over were Metals Creek’s fantastic recent intercepts at the Thomas Ogden Zone, supported by active drill programs and pending news in the weeks and months to come. With support at the 52-week low of $0.04 and news pending, we are comfortable building a position at the current price and see minimal downside risk. We have no problem seeing this stock doubling or tripling from this point, with the reasonable expectation the company should continue its current winning streak at the Thomas Ogden Zone. With all these outstanding catalysts in place, we estimate little downside risk, and if the stock softens further, we intend to add and wait with great expectation for the pending drill results.

To good trading and even better investing,

Adam Greene
TekTrader Advisories Inc.

Adam “TekInvestor” Greene is an investment educator with a passion for analysis and discussion of all types of money-making ideas. TekTrader Advisories Inc. manages private equity portfolios that enhance growth through speculative investing in TSX-V and OTC listed junior stocks in the natural resource and tech sectors. A credentialed scientist and member of the Market Technician’s Association, Adam regularly publishes stock technical updates and freely shares his personal investment strategies with followers and subscribers. The TekTraders Speculative Portfolio is hosted on Stockhouse.com.

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