Kiernan wants to expedite Monarch resurrectionThe West Australian June 23, 2009, 7:45 am Send
Michael Kiernan's Stirling Resources will inject funds into failed gold miner Monarch Gold Mining enabling it to pay off its creditors in full and resume operations at its Davyhurst and Mt Ida gold projects near Kalgoorlie.
Monarch entered voluntary administration in July last year following continued underperformance at its Davyhurst open pit mine.
But Mr Kiernan has seized on an opportunity to resurrect the company based on the strong rise in the price of gold in recent months.
He said the plan was to pay off creditors on Monarch the $55 million they were owed, recommence operations as soon as possible ahead of a proposed name change to Swan Gold Mining and re-list the company on the ASX.
According to a $250,000 mine study by Stirling, Mt Ida could produce 48,000 ounces a year at a cost of $450 per ounce while Davyhurst, which could be commissioned within three months of settlement, could produce 65,000 ounces a year at a cost of $850 per ounce.
"We had been determined to reach and agreement that enabled all creditors and debt providers to receive full payment and to see the Monarch corporate structure survive for the benefit of all existing shareholders together with ensuring a healthy return for Stirling Resources via dividends," Mr Kiernan said.
He said he expected ultimately Stirling would hold 40 per cent of the refloated Swan Gold Mining.
"Equity funding for Swan Gold Mining is expected to be satisfied by Stirling Gold issuing a commercial bond to Austrian international commodity leader DCM DECOmetal, a major (19.9 per cent) shareholder in Stirling Resources," the company said in a statement.
Monarch's creditors will vote on the recapitalisation plans at a meeting on Tuesday, June 30.
Stirling Resources shares were off two cents, or 7.14 per cent, to 26 cents at 12.30pm.
RNG Price at posting:
48.0¢ Sentiment: Hold Disclosure: Held
