ASX/ MEDIA
RELEASE
07 JULY 2008
MONARCH ADVANCES WITH
$30M GO FORWARD FUNDING
Monarch
Gold Mining Company (ASX /DIFX:MON) is pleased to announce a clear go forward
funding package has been put in place to underpin the operations of the Mount
Ida and Mount Magnet gold projects.
As
part of the funding package, the Board of Monarch will undertake a $25 million
capital raising at 25 cents per share with a one-for-one attaching free 25 cent
option. As part of the $25 million raising, the founding Chairman and major
shareholder Michael Kiernan?s family will provide an interest free $15 million
loan which subject to shareholder approval will be converted to equity on the
same terms of the capital raising. The balance of the capital raising of
$10 million will be underwritten, at no cost, by the Kiernan family.
In
addition, Monarch expects to raise $5 million from the sale of the Minjar gold
asset.
Monarch
Managing Director Michael Kiernan thanked all shareholders for their ongoing
commitment to the Company.
?Recent
times have proved to be difficult for Monarch, and on behalf of the Board, I?d
like to express our thanks and gratitude for the people who have supported our
company. Securing a significant funding package is a serious achievement for
shareholders and we look forward to operating our two gold projects ? Mt Ida
and Mt Magnet ? in the robust gold market of the future,? Mr Kiernan said.
?Following
an equity placement, Harmony Gold Mining Company ? from which Monarch acquired
the Mt Magnet Gold Project - will retain a 23 % interest in Monarch. It is
testament to the quality of Monarch?s management, gold assets and strength of
the gold market that a company the size of Harmony will retain a large
shareholding in Monarch.?
Mt
Ida Gold Project
Going
forward, Monarch expects Mt Ida to produce 50,000 oz per year, at an average
grade of 16g/t, with projected cash costs below AUD$500.
Over
the next 12 months, it is proposed to sink another shaft (at an approximate
cost of $5 million) to increase the annual production to a projected 75,000
ounces per year. Monarch plans to treat the Mt Ida ore at a third party?s
plant.
Mt
Magnet Gold Project
Since
taking over the Project, Monarch has identified 30 prime targets, optimised 23
and prioritised seven for a closer geological analysis. All targets are based
on open pit models.
Monarch
plan to recommence operations mid 2009 to produce 100,000oz per year with a
projected cash cost below AUD$600..
A
break down of the revised transaction terms as agreed with Harmony are set out
below:
Cash
deposit
(paid)
$5 million
Settlement
payment (following shareholder
approval)
$10 million
Deferred
payment (three
years)
$10 million
Monarch
equity (100 m shares at 25
cents)
$25 million
3
year 5% convertible note (convertible at 25
cents)
$15 million
$65 million
A
shareholder?s meeting is proposed to be held at the end of August to ratify the
share issue and capital raising. In addition, shareholders will be asked to
approve the acquisition of the Mount Magnet Project, the issue of shares to
Harmony and the Kiernan family.
Monarch?s
securities will remain suspended until after the meeting of shareholders.
For
further information, please contact:
Michael
Kiernan
Warrick Hazeldine
Managing
Director - Monarch
Gold
Purple Communications
Tel:
+61 8 9324
7002
Tel: +61 (0)8 9485 1254
Mob: 0417 944
616
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.
***
Issued
by
Purple
Communications
Level
3, 28 Kings Park Road, WEST PERTH WA 6005
Ph:
08 9485 1254 Fax: 08 6263 0455
purple@purplecom.com.au