OVERVIEW

Hinterland Metals Inc. is focused on precious metal exploration in Quebec, Ontario and Manitoba. It also holds properties in Nunavut and Nova Scotia. The Company’s projects and hands-on exploration strategy offer excellent potential for increasing shareholder value and liquidity. Hinterland’s experienced management team continues to evaluate and aggressively acquire additional exploration projects as capital and opportunities present themselves. In addition to its active projects, Hinterland holds a portfolio of other non-active projects. Management has successfully and actively seeks to vend these projects in whole or in part to other exploration companies in order to reduce exploration risk and generate revenue.

PROJECTS

Plateau PGE Project, Quebec

Hinterland holds a 100% interest in the Plateau PGE Project located 30km southeast of Matagami in the Abitibi Region of Quebec. The project includes the Ebay and Plateau properties. Both properties are subject to 2% royalties on all metal and diamond production payable to the original property vendors.

Since June 2006 Hinterland has concentrated most of its exploration efforts on the Ebay property. This strategy made very good sense during a period when platinum prices rose steadily from $US1100 in early May 2006 to a peak of $US2252 in early March 2008 and palladium prices went from $US380 to $US579. The prices of these metals started a rapid decline in mid-July 2008 and have recently hit five-year lows of $US738 for platinum and $US158 for palladium. Hinterland’s exploration work on the Ebay property was very successful with a new discovery being made by drilling in November 2006 and further good drill results being announced in March 2007 and February 2008.

However, it is apparent that the automotive manufacturing sector is in steep decline. Since the principal use of platinum and palladium is for autocatalytic anti-pollution devices, it seems unlikely that the prices of these metals will recover in the short term. In light of all these events, management believes it to be in the best interests of the Company to put the Ebay project on hold and focus on the Company’s most advanced gold properties in the Abitibi Greenstone Belt of Quebec and Ontario.

Lockout Gold Project, Quebec

Hinterland holds a 100% interest in the Lockout gold property situated in the Chibougamau Mining District of Quebec 4km west of Noront Resources Ltd.’s Windfall Lake Project. In June 2007 the Company completed 854m of drilling in five holes. Four of the five holes intersected anomalous gold values with a best gold value of 4.92g/t Au over 0.50m in LK07-04. Generally, the elevated gold values relate to felsic porphyry with strong local sericite, carbonate and fuchsite alteration and fine-grained disseminated sulphide mineralization. A recent 43-101 compliant report recommends a $235,000 program of surface work and drilling to focus on locating and testing the felsic porphyry dykes. A grid was cut on the property in May 2008. An induced polarization survey was undertaken in July 2008 but had to be stopped due to excessive flooding on the property. This work will resume when colder conditions prevail.

Teck Gold Project, Ontario

Hinterland holds a 100% interest in the Teck gold property located in an under-explored part of the Kirkland Lake Gold Camp approximately 2.5km west of the producing Macassa Gold Mine. Kirkland Lake has documented production of 24.1 million ounces gold at an average grade of 0.47opt from eight mines during the period from 1917 to the present day. Hinterland has completed a comprehensive surface program integrated with shallow drilling. It is anticipated that the next round of exploration will involve 4500m of deep drilling at an estimated cost of $675,000. The Company is seeking equity or joint venture financing to complete this work.

Raney Gold Project, Ontario

Hinterland holds a 100% interest in the Raney gold property 130km southwest of Timmins in the Porcupine Mining Division of Ontario. The property is located in the Archean Swayze Greenstone Belt and is underlain by felsic to intermediate volcanic and feldspar porphyry intrusive rocks. Two surface showings have been identified to date. Recent drilling completed by Hinterland under the first showing intersected two parallel zones of gold mineralization separated by approximately 20m. The best gold mineralization was encountered in the “Lower Zone” where 2.8g/t Au and 0.5g/t Ag over 15.5m was intersected including 13.8g/t Au and 4.1g/t Ag over 1.7m. A recent 43-101 compliant report recommends a $470,000 phase one exploration program consisting of geophysical surveys and additional drilling. Hinterland expects to start this program in January 2009 when logistics are more favourable.

OUTLOOK

Despite Hinterland’s recent decline in share value and market capitalization, management is still focused on building a long-term profitable business that will survive and thrive beyond the market extremes of 2008. The current pressure on metal prices is an irrational response to the credit crisis in the United States. Moreover, metals are fundamental to the development of emerging economies and will continue to remain in high demand. Accordingly, Hinterland expects that metal prices will recover in 2009 and that mineral exploration will remain a viable industry.

Hinterland currently has approximately $650,000 of unrestricted working capital, no debt and a strong portfolio of exploration properties. All of its properties are in good standing for a minimum of four years with no further investment by the Company. This diverse property portfolio allows management to switch priorities according to market conditions. Management’s working philosophy has always been hands on with the most of the exploration work done in house rather than by expensive outside consultants. Hinterland also benefits from strong personal relationships with key suppliers many of whom are long-term shareholders.

Many junior exploration companies will not make it through these tough times. Companies that are particularly at risk are those with projects in remote areas where logistics and lack of infrastructure make exploration very costly. Hinterland has always concentrated on areas where it is relatively cheap to operate and the regulatory environment is friendly. Hinterland sees plenty of opportunity in the distress of its competitors and is on the look out for prospective properties and high-quality projects becoming available over the next several months. Hinterland’s experienced management team has spent the last several years bringing a number of projects to the drill-ready stage and it is well poised to make a discovery well-timed to the current markets.

MANAGEMENT

Mark Fekete, - President, CEO & Director
Ingrid Martin - CFO
Greg Fekete - Corp. Secretary & Director
Fred Kiernicki - Director
Vaughan MacLellan - Director
Peter Thiersch - Director

Last changed at 07-Oct-2009 09:22AM by AGORACOM