500,000oz x $630US per oz = $315,000,000per year
MEDIA RELEASE 5 JULY 2006
MONARCH GOLD GEARS UP FOR PRODUCTION
Monarch Resources Limited (ASX: MRS) has taken further key steps towards the production phase at its Western Australian gold projects with the proposed appointment of experienced mining executive Allan Quadrio as Managing Director to oversee its growth strategy.
Monarch – which today received shareholder approval to change its name to Monarch Gold Mining Company Limited to reflect its growth vision to build a 500,000oz per year gold company – also announced the completion of its acquisition of the 400,000oz Minjar Gold Project from Gindalbie Metals Limited for a staged total of $10 million.
Quadrio – who stepped down last week as Executive Director of Consolidated Minerals (remaining as a non-executive director) – is one of Australia’s most accomplished operations and mining executives, having played a key role in the development of Consolidated as a diversified mining group over the past 8 years.
He is a qualified metallurgist with over 30 years experience in mining operations, including senior management positions in nickel, gold and industrial minerals operations. He has been Resident Manager at various mine operations within Western Australia, including WMC’s Hill 50 and Tuckabianna gold operations and Leinster Nickel Operations.
John Davis, who joined Monarch as Managing Director last year, has been appointed to the new role of Technical Director to enable him to focus his attention on the growing exploration activities of the Group, including major exploration campaigns across its three proposed production centres at Davyuhurst, Minjar and Bellevue.
Completion of the Minjar acquisition clears the way for an intensive program of drilling to commence targeting numerous prospective areas with the potential to deliver additional reserves. High-level optimisation scoping studies have also been completed on the current resources and are currently being compiled, which are expected to give an indication of the economic viability of early re-commissioning of the 600,000tpa Minjar gold plant.
Monarch’s objective is to establish a 3-year gold reserve inventory at Minjar which would enable re-commissioning of the plant at an initial production rate of 50,000oz per year.
At Davyhurst, Monarch reported further high-grade drilling results from the Sunraysia Deposit (64,000oz resource), one of several key deposits where it is targeting extensions to existing resources. Intercepts from recent drilling include 3m @ 10.4g/t gold, 3.1m @ 13.8g/t gold and 2m @ 9.7g/t gold. Final results have been received and a new resource estimation is currently being prepared and is due for completion by the end of July 2006.
An initial 1,500m RC drilling program has also been completed at the Lady Bountiful deposit targeting extensions to the existing resource of 88,000oz. Drilling has indicated a prominent quartz reef with results currently awaited. High-level scoping study optimizations on resources at Walhalla, Ida, and Siberia are due for completion shortly, following the successful optimization on the Sand King deposit in February 2006.
Preliminary indications are that the 1.2mtpa Davyhurst gold processing plant can be re-furbished within a short time frame at a relatively low capital cost, as part of Monarch’s objective to recommence the operation at an initial production rate of 100,000oz per year.
Monarch’s Executive Chairman, Michael Kiernan, welcomed Allan Quadrio’s appointment, saying he added a significant depth of operational expertise to the Company’s board and management as it moved into the development phase at its three operational centres in Western Australia.
“Allan will spearhead the operational development of the Group as we move to commence gold production, initially at Minjar and Davyhurst,” Kiernan said. “With these appointments and the recent excellent progress at Davyhurst and Minjar, Monarch Gold has made further important progress towards its objective of establishing a 500,000oz per year gold company.”
JULY 2006 OPTIONS
Monarch also announced today that it has reached agreement with Australian broking firm Patersons Securities Limited to underwrite the exercise of 15.3 million 20 cent options due to expire in July 2006. The exercise of these options will raise $3.06 million before costs, which will strengthen Monarch’s cash reserves to pursue its growth strategy. Patersons will receive a management and underwriting fee of 5% of the amount underwritten.
-ENDS-
Released by:
On behalf of:
Jan Hope/Nicholas Read
Monarch Resources Limited
Jan Hope & Partners
Telephone: (+61-8) 9388-1474
Michael Kiernan – Chairman
Telephone: (+61-8) 9481-6422
Web: www.mrl.net.au
2
BACKGROUND INFORMATION
Monarch acquired the Davyhurst Gold Project for $5 million in November 2005, comprising an 808,000oz resource base, 841sq km tenement package and a 1.2mtpa gold processing facility. The Davyhurst Project is located within the Davyhurst-Mt Ida greenstone belt, which hosts the Zuleika Shear and Ida Fault – structures which reportedly control signifcant gold endowment. Historically, the Davyhurst field has produced some 1.15 million ounces since 1897.
Subsequently, in early 2006, it completed a merger with Siberia Mining Corporation Limited, resulting in the strategic consolidation of the nearby Siberia and Ida Gold Camp deposits within the enlarged Monarch.
Siberia’s assets included a 1.2 million ounce resource base, a 1,250sq km exploration portfolio representing the largest Australian-controlled ground position in the Kalgoorlie region, and several projects with near-term production potential. The 35km long Siberia Gold Belt is a geological contact that hosts the high-grade Siberia Gold Camp deposits (comprising resources in excess of 750,000oz at Missouri, Sand King, Invincible and Black Rabbit). Much of this gold belt is obscured by thin cover and remains untested.
In April 2006, Monarch announced that it had reached agreement with Gindalbie Metals Ltd to acquire the Minjar Gold Project, located 500km north-east of Perth, as the basis for a second production hub. The Minjar Project has JORC compliant resources of 406,400oz and includes a fully permitted 600,000tpa gold production facility.
Monarch also has the ground package surrounding the historic Bellevue Gold Mine, located 40km north of Leinster close to Jubilee Mines’ Cosmos Nickel Operations. Previously owned and operated by Homestake, Bellevue was one of Western Australia’s premier gold mines with total historic production of 750,000oz and remaining JORC classified resources of approximately 120,000oz.
The Bellevue ground package, which includes the more recently discovered Southern Belle deposit, offers significant development potential and will be a focus of Monarch’s exploration and development activities as a potential third production hub.
Monarch’s focus is to build a significant independent Australian gold exploration and production company with an annual production of 500,000 ounces by advancing these Northeastern Goldfields assets towards production as rapidly as possible, with the initial focus over the next 12 months on a comprehensive exploration program to build a minimum 3-year reserve position prior to re-commissioning the Davyhurst mill.
In addition, Monarch will draw on its depth of technical, financial and corporate expertise to target additional growth opportunities in the current strong environment for gold companies.
-ENDS-
Released by:
On behalf of:
Jan Hope/Nicholas Read
Monarch Resources Limited
Jan Hope & Partners
Telephone: (+61-8) 9388-1474
Michael Kiernan - Chairman
Telephone: (+61-8) 9481-6422
Web: www.mrl.net.au
So far as it relates to ore and mineralisation, this report is based on information compiled by Mr John Davis, who is a Member of the Australian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists Mr Davis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Davis is a full time employee of the Company. This report accurately reflects the information compiled by Mr Davis. Mr Davis has consented to the inclusion of this information in the form and context in which it appears in this report.
MRS
monarch resources limited
