ASX/ MEDIA RELEASE 5 JUNE 2008
MONARCH ADVANCING AT MT MAGNET
- MARKET UDPATE -
Highlights
? High level optimisation studies confirm positive results from Mount Magnet resources.
? At A$1,000 per ounce and using current costs, resources modelled returned positive cashflows of $111.8 million.
? Exploration program in place to expand gold resources, and investigate iron ore potential.
Monarch Gold Mining Company (ASX /DIFX:MON) has hit the ground running at the Mount Magnet Project, with early optimisation studies delivering positive results for open cut and underground operations.
Monarch agreed to purchase Mount Magnet from Harmony Gold in November 2007, and formally took possession of the project in April.
Managing Director Ian Huitson said the Company has immediately commenced preliminary studies on the Mount Magnet Project to capitalise on the established 2.9 million ounce gold resource base, as well as leverage the large landholding package with drilling programs.
?We are reviewing the significant data package from the Mount Magnet project, and are advancing scoping level optimisation studies on open cut and underground resources,? Mr Huitson said.
?The outcomes to date have been positive and will be followed by more detailed studies, along with ongoing exploration to further define and expand the resource base.?
?We are putting a program of drilling and sampling together across the 1,100km2 tenement both for gold, and to explore untested iron ore potential,? Mr Huitson said.
Optimisation studies deliver
The Mt Magnet project total resource stands at 28.2 Mt at 3.2 g/t Au for a contained 2.9 million ounces of gold, with 19.4 Mt at 3.3 g/t Au for 2 million ounces in the Measured and Indicated category.
Mr Huitson said preliminary high level scoping optimisation studies completed on 19 modelled open pit resources at Mt Magnet have shown early stage potential to provide positive results. Significant further work is required to confirm and realise the potential.
Resource modelling conducted at A$1,000 per ounce and using current costs had returned positive cashflows of $111.8 million.
?Ore tonnes generated totalled approximately 4.3 million tonnes at an average grade of 2.4 g/t gold, at average cash cost of A$640 per ounce and generated some 310,000 ozs of gold,? Mr Huitson said.
?Work is now in progress to determine the scope to expand the individual deposits with further drilling, to upgrade the resource classifications and further refine the scoping studies,? Mr Huitson said.
Monarch has also commissioned a high level scoping study into the potential of re-opening the Hill 50 underground mine. This study has indicated that at A$957 per oz and subject to confirmatory drilling, a viable underground mine exists.
On this basis the mine would generate an operating surplus of A$16 million per year over an initial three years, producing 50,000 ozs per year at a head grade of 8.8g/t Au.
Studies have indicated that the lower levels of the mine have shown increased resource ounces per vertical metre from the historical average of +/- 600 ozs Au/vm to 900 to 1,200 ozs Au/vm. This would need to be confirmed by further drilling.
The Hill 50 underground resource currently stands at 1.6 Mt at 6.6 g/t Au for 340,000 ozs, of which 1.2 Mt at 6.7 g/t Au for 258,000 ozs is in the Measured and Indicated categories. The deposit is open at depth.
Exploration
Gold
Monarch commenced a 3,000m exploration RC drilling programme during May 2008, following a review of available data. The program will focus on the Hill 50 and Saturn Bars, which have been poorly tested in the Brown Hill and West Saturn areas.
Boogardie Break structures, known to host and control gold mineralisation in the Mt Magnet district, are seen to cross-cut the prospective Banded Iron Formation (BIF) horizons. The potential of these areas has been developed from interpretation of re-processed magnetic data.
Results are expected in the next few weeks.
Iron Ore
The Mt Magnet area contains significant occurrences of BIF which have not been assessed for their potential to host economic concentrations of Iron Ore.
Utilising geophysical data, geological mapping and ground assessment, the potential exists for significant tonnages of iron ore formation (200 million tonnes). Monarch is currently carrying out a channel rock chip survey across the BIFs to determine an indicative Fe content prior to considering a drilling assessment.
For further information, please contact:
Ian Huitson Warrick Hazeldine
Managing Director - Monarch Gold Purple Communications
Tel: 08 9481 6422 Tel: +61 (0)8 9485 1254
Mob: 0417 944 616
Background
The Company has a resource base of more than five million ounces, two state-of-the-art gold treatment plants (Davyhurst and Mt Magnet), 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 and an expanded footprint in the Mount Magnet region.
Monarch remains firmly on track with its production targets, with mining commenced at the Davyhurst and Mt Ida projects.
Growth Strategy
Monarch?s growth strategy is focused on two major potential production centres in Western Australia:
Davyhurst Gold Project ? Davyhurst Project gold resources of over 1.5 million ounces (comprising Measured ? 0.26MT @ 3.1 g/t Au, Indicated ? 12.38MT @ 2.3 g/t Au, Inferred ? 6.89MT @ 2..4 g/t Au within a 2,000 sq km tenement package and 1.2mtpa gold processing facility (+1.2Moz historic production). First bullion was poured in August 2007. Davyhurst Gold Project incorporates the Riverina Project ? 200,000 ozs (comprising Indicated ? 1.46MT @ 3.5 g/t Au, Inferred ? 0.18MT @ 5.6 g/t Au) and also the Mt Ida Project ? 111,000 ozs (comprising Measured ? 55,000T @ 32.8 g/t Au, Indicated ? 6,000T @ 33.8 g/t Au, Inferred ? 83,000T @ 17.5 g/t Au within four areas - the Baldock, Whinnen, Meteor and Timoni deposits. Monarch commenced mining gold in July 2007.
Mt Magnet Gold Project ? gold resource of 2.9 million ounces (comprising Measured ? 2.9MT @ 2.5 g/t Au, Indicated ? 16.5MT @ 3.5 g/t Au, Inferred ? 8.8MT @ 3.0 g/t Au), a ground package of 330 tenements covering approximately 1,100 square kilometres and a 2.7mtpa capacity gold processing facility (+10 million ounces of current resources and past 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.
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 Gold Mining Company
Projects
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