MONARCH GOLD MINING COMPANY LIMITED
CHAIRMAN’S ADDRESS
ANNUAL GENERAL MEETING
16 NOVEMBER 2007
Ladies and gentlemen, Monarch continues to make
progress towards our long term target of becoming a 500,000 ounce gold
producer.
Our Davyhurst mine commenced production during
July 2007 and we celebrated our first gold pour in August. This was only
some six months after the formal go-ahead was made to refurbish the Davyhurst
mill.
Our start up pit, Walhalla, has proved to be a
disappointment but we have now overcome most of the initial teething problems,
which should enable our target of 10,000 ounces per month to be achieved by the
first quarter of 2008. What I can say is that the Walhalla pit has now
stabilised and will not be cash negative for its conclusion.
To look back briefly over the last year, we
have:
Ø
successfully
integrated the Siberia Mining Corporation assets that were acquired back in
March 2006;
Ø
acquired
the Minjar project from Gindalbie Metals;
Ø
made
solid progress in our exploration efforts and re-optimisation of resources,
ahead of re-commencement of mining operations at Davyhurst;
Ø
made
the decision to re-commence production at Davyhurst, including plant
refurbishment and then the commencement of mining in June 2007;
Ø
recruited
an experienced senior management and operations work force, in what is well documented
as difficult times to attract good quality people;
Ø
acquired
the Mt Ida underground mine and the Riverina deposit, both of which are making
an early contribution to our production base for Davyhurst;
Ø
listed Monarch’s shares on the Dubai Stock Exchange,
a move which I am confident will provide international exposure and
institutional support for Monarch in the future.
More recently, we have announced the purchase
of the Mount Magnet operations from Harmony Gold
Mining Company for $65 million. The Mount Magnet package comprises a resource
inventory of 2.7 million ounces, tenements covering 1,100 square kilometres, a
2.7 million tonne per annum capacity plant and the historic Hill 50, Great
Fingall, St George, Star and Big Bell mines.
Our plans are to place the Hill 50 mine on care
and maintenance for up to two years, while we focus on comprehensive drilling
programmes to extend the existing resource base and to review and re-optimise
the existing resources. We expect to be back in production at Hill 50
within 18-24 months, at an initial production target of 150,000 ounces per
annum.
This acquisition will also give Monarch the
momentum to dual list on the Toronto Stock Exchange, where well-run gold
producers receive much more attention globally and where valuations are much
higher than on the ASX.
The TSX listing will include a capital raising
to fund the cash component for the purchase of the Mount Magnet
operations. Ahead of the listing, we are proposing to consolidate
Monarch’s capital and a shareholders meeting has been convened for
mid-December to consider these proposals.
I would like to also make comment that we as a
Board are disappointed with the current share price performance of
Monarch’s shares, particularly when you consider that when Davyhurst and
Hill 50 are in full production, our potential earnings at current gold prices
are in the order of $75-$80 million per annum.
In summary, we have had a very active year but
this is only the beginning. I am confident that 2008 will prove to be a
watershed year for Monarch, as we establish ourselves as a significant gold
production group.
I thank you for your continuing support.
Michael Kiernan
Chairman
Monarch Gold Mining Company Limited
Issued
by
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PERTH WA 6005
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