Welcome To The Metalor HUB On AGORACOM

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Message: Welcome all..new M&D..making progress on the gold front...gas is paying the bill

The management discussion and analysis, prepared as of February 14, 2011 review and summarize the activities of Metalore

Resources Ltd. (“Metalore” or the “Company”) and compare the financial results for the period ended December 31, 2010 with those from

December 31, 2009. The following should be read together with the unaudited financial statements for the nine months ended December 31,

2010 and related notes attached thereto, which were prepared by management in accordance with Canadian generally accepted accounting

principles. The reader should also refer to the annual audited financial statements for the years ended March 31, 2010 and 2009 and the

related notes attached thereto. All amounts are stated in Canadian dollars unless otherwise indicated.


Metalore has been active in mining exploration for over sixty-five years and in Natural Gas development for over fifty years. The

company participated in early development of the Provost gas field in Alberta from 1956 through 1961 and has been the major player in

developing the Norfolk gas field in Southwestern Ontario since 1964, pioneering technologically advanced completion and fracturing

techniques. The Ontario Natural Gas operation constitutes the “core business” of the Company and is its principal source of revenue. The

Cash Flow from production and investments is prioritized and allocated among (1) maintaining capital liquidity, (2) drilling new wells to sustain

and/or increase production, (3) fielding select mining exploration projects and (4) paying dividends from profits to Shareholders.

Metalore is a unique Company in the junior resource sector. It has the lowest number of shares outstanding of any

resource stock listed on the Toronto Stock Exchange (“MET” on TSX). The Company has protected the equity of shareholders for

the past forty years by financing all exploration and development costs with cash flow from operations. Metalore inaugurated

payment of its first cash dividend to shareholders in the year 2000 and has since paid its eleventh consecutive annual dividend from

operating profits.


Management of the Company has established a record of discovering and outlining precious metal resources ( Brookbank, Fox Ear,

Cherbourg and Irwin, in the Windigokan Lake area, Northwestern Ontario, which are 43-101 compliant). The major interests in these deposits

were sold in 1998, subject to joint venture participations and various royalty payments to Metalore.

Metalore manages a large portfolio of undrilled petroleum and natural gas leases and sustains production by the systematic drilling

of new wells. The Company has consistently located its wells on ultra wide spacing patterns to minimize the year to year decline in

deliverability and maximize the longevity of production – which can be verified by its forty-five year production record.

For the past decade


Metalore has been consistently selling the majority of its gas production at forward “strip contract” prices that have been substantially higher

than the current NYMEX (New York Mercantile Exchange) price at time of delivery (see note 2 of attached financials).

Metalore’s Natural Gas Operation continues to yield the highest MARGIN of profit (per capital invested and revenue

recovered) of any actively developing gas producer in Ontario.


During the nine month period reported herein Metalore staked an additional 172 mining claim units


, more than doubling our land

position in the Cedartree Lake area, Northwestern Ontario,

where an accelerated two year exploration program is well underway.

From July to September we forged some six kilometers of “buncher” access into remote locations in wilderness territory and

conducted geophysics and power stripping on select targets along the way. We also exposed the projected extension of the main gold zone

on surface with power stripping. In September we commenced detailed geological and structural mapping of the main gold zone and by mid-

October we resumed diamond drilling (for the first time since March 2008). Geophysical targets 4, and 5. (front cover map, 2010 Annual

Report) were drilled. The Gabbro target (5.) yielded a wide section of disseminated Magnatite, assaying 6% Iron, with Titanium but only

negligible Precious Metal values. Although there was nothing of economic significance in this hole, the premise of correlating our applied

geophysics and geology to precisely locating metallic minerals was positively confirmed and we will continue to pursue these outlying targets

with our drill in the coming months.

We had constructed a tree mat across a 100 meter bog lying “along strike” to the south west of the felsic intrusive associated with

the main gold discovery and between November and December drilled five new holes, into uncharted territory under the mat. The concealed

intrusive was highly dilated (from 51 meters wide along the north discovery hill, to more than 200 meters wide beneath the mat), was

pervasively altered (quartz flooding, carbonate, chlorite, sericite) and well mineralized with pyrite, but carried only low, but continuously

anomalous gold and silver values throughout. Further, on strike to the southwest, the intrusive narrows again where we have stripped it

intermittently for some 200 meters in length and a single sample which we cut at the edge of a small outcrop (prior to stripping) assayed 2

grams gold cross 5.8 meters. So we have a lot more drilling to do along this main gold trend as well.

On December 15


, with the minimum footage on our drilling contract exceeded, our drillers informed us that they would be leaving

for holidays upon completion of the present hole. O.K. After nearly six months in the bush without a pause (for Armen and George), with two

feet of snow on the ground and temperatures falling below zero (Fahrenheit) and daylight and our stove wood supply rapidly diminishing, we

were coerced to temporarily take a break. We had accomplished quite a lot on this campaign thus far, and like MacArthur, we were (and are)

determined to “return” (come spring) and carry on the assault.

Metalore will continue to efficiently apply the optimum of its human, technical and financial resources to expediently bring

this key project to a definitive, successful conclusion.

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