MEDIA
RELEASE 8
June 2007
MONARCH EXTENDS RICH MT IDA ACQUISITION
Monarch Gold Mining Company Limited (ASX:MON) has reached
an agreement to extend its tenement stake surrounding the rich Mt Ida Gold Mine,
located approximately 200km north-west of Kalgoorlie.
Monarch has an agreement
with International Goldfield Limited (ASX: IGC) for the purchase of IGC’s
remaining Mt Ida tenements for $5 million. The agreement provides Monarch a
tenement package at Mt Ida incorporating a Farm-in and Joint Venture agreement
with La Mancha Resources Pty Ltd. La Mancha can earn a 51% farm in right,
following its expenditure of A$7.5 million on gold exploration by January 2010.
The acquisition secures the down plunge
extensions of the Baldock, Meteor and Whinnen resources and access to the
Timoni mine and extensions, which historically produced 265,000 ounces of gold.
In addition, Monarch will secure 500 square kilometres of the highly
prospective Mt Ida/Ularring Greenstone Belt.
The acquisition is conditional upon La
Mancha signing a waiver of its pre-emptive rights under the Farm-in
and Joint Venture agreement by 30 June 2007. Settlement of $2.5 million in cash
is expected in July 2007 with the balance payable in cash on 31 December 2007.
On 26 February 2007, Monarch announced it had reached
an agreement with IGC to acquire the mining rights to the high grade Mt Ida
Mine and associated infrastructure, plant and equipment including a 30 man camp
at Mt Ida.
Monarch Chairman Michael Kiernan said the agreement to
acquire IGC’s remaining Mt Ida tenements further increased
Monarch’s already substantial tenement holding in the region.
“Increasing Monarch’s strategic
landholding is important for long-term shareholder value as the company advances
to achieve the gold production
target of 500,000oz per annum by 2009,” Mr Kiernan said.
Monarch confirms mining
has also commenced today at Davyhurst.
“With the Davyhurst
Mill refurbishment virtually complete and mining commencing today, Monarch is
on track for gold production next month at an average head-grade of 5.3g/t.
“With the current
gold price hovering around US$670 per ounce, Mt Ida Mine is on track to deliver
significant returns for shareholders and over the next 12 months, Monarch
expects to generate A$25 million in after tax profit,” Mr Kiernan said.
The Mt Ida tenement acquisition
will be funded from existing cash reserves.
For more
information please contact:
Michael
Kiernan Warrick Hazeldine
Chairman - Monarch
Gold Purple
Communications
Tel: 08 9481 6422 Tel:
+61 (0)8 9485 1254 Mob:
+61 (0) 417 944 616
whazeldine@purplecom.com.au
Background
The Company has a resource base of more than 2.4
million ounces, two state-of-the-art gold treatment plants, and has dominant
ground positions in the prolific gold mining region to the north-west of Kalgoorlie.
Monarch now has the largest Australian-controlled
ground position in the Kalgoorlie
region.
The company has laid the foundations for its growth
as a mid-tier Australian gold production company. Key assets include the
Davyhurst Gold project, the Minjar Gold project, the ground package surrounding
the historic Bellevue Gold Mine near Leinster, together with the Siberia Mining
Corporation Limited merger, which provided access to Siberia
1.2 million ounce resource base.
Monarch remains firmly on
track with its production targets, with mining commenced at the Davyhurst
project and mining of the first ore at Monarch’s Mt Ida project expected
in late July. Refurbishment of the Davyhurst Mill is on schedule, with
supporting infrastructure already in place.
Monarch is on the cusp of production at Davyhurst with
the mill to start-up in mid-July with head grade of 5.3g/t Au and. the first
gold to be poured in late July.
Growth
Strategy
Monarch’s
growth strategy is focused on four potential production centres in Western Australia:
Davyhurst - gold resources of over
2m oz within a 2,000 sq km tenement package and 1.2mtpa gold processing
facility (+1.2Moz historic production).
Mt Ida - resources are stated as
143,000t at 24.0 g/t containing 110,650 ounces of gold within three areas - the
Baldock, Whinnen and Meteor deposits, adjacent to the historic Timoni
underground gold mine which produced 265,000oz of gold. Monarch will commence
mining gold in July 2007.
Minjar - gold resources of over
400,000oz within a 1,722 sq km tenement package and 600,000tpa gold processing
facility (+120,000oz historic production).
Bellevue - gold resources of
120,000oz associated with the historic Bellevue Gold Mine, one of WA’
premier gold operations (750,000oz historic production).
Monarch’s strategy has been to capture
opportunities for the consolidation of gold development assets which have not
in the past realised their full potential, either due to a lack of capital or
to limited exploration.
Monarch is focussed on gold production, with a target
to be producing 500,000oz per annum by December 2009.
For further
information visit: www.monarchgold.com.au
So far as it
relates to ore and mineralisation, this report is based on information compiled
by John Davis, who is a Member of the Australian Institute of Mining and
Metallurgy and the Australian Institute of Geoscientist. Mr Davis has
sufficient experience which is relevant to the style of the mineralisation and
type of deposit under consideration and to the activity which he is
undertaking, to quality as a Competent Persons as defined in the 2004 Edition
of the Australasian Code for Reporting for Exploration Results, Minerals
Resources and Ore Reserves. Mr Davis is a full time employee of the Company.
This report accurately reflects the information complied by Mr Davis. Mr Davis
has consented to the inclusion of this information in the form and context in
which is appears in this report.
Monarch’s
Project locations:
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