ASX / MEDIA RELEASE
4 FEBRUARY 2008
MONARCH
FINALIZES MT MAGNET PURCHASE AGREEMENT
Monarch Gold Mining Company (ASX /DIFX:MON) is pleased to announce the
company has finalised and signed the share sale agreement for the purchase of
the Mount Magnet Gold Operations which includes the historic Hill 50 gold
project and Big Bell gold operations near Mt Magnet.
Monarch announced the acquisition of Hill 50 from Harmony Gold Mining in
November last year and
will take possession on 1 April 2008. The
purchase process is due for completion on 30 June 2008.
The Hill 50 project represents a significant and strategic acquisition
for Monarch, delivering known gold reserves, modern processing facilities and
one of the largest landholdings in the Mount Magnet
region.
Monarch Chairman Michael Kiernan said the company is well advanced on
raising capital to complete the share sale agreement.
“Despite capital and credit markets changing substantially in
recent times, we are confident of raising $35 million to complete the
conditions precedents attached to the purchase process,” Mr Kiernan said.
The Mt Magnet asset package comprises a
resource inventory of 2.7M ounces of gold, tenements covering approximately
1,100 square kilometres, along with a 2.7mtpa capacity plant.
Monarch intends to put the Hill 50 mine on
care-and-maintenance for up to two years, while it focussed on exploration
activities across landholdings.
Monarch will launch a substantial drilling
program on the landholding to extend the current 2.7 million ounce gold
resource base.
A budget of $10 million per year for the next two years has been
allocated for exploration on the extensive Mt Magnet tenement.
“The Monarch Board
remains confident 2008 will be a very strong year for an unhedged gold and debt
free producer with exposure to the robust gold price.
“Monarch shareholders
will continue to gain exposure to the largest Australian-controlled landholding
in the Kalgoorlie
region and a ramp up in production from Monarch’s Davyhurst and Mt Ida
assets.
For further information,
please contact:
Michael Kiernan
Warrick Hazeldine
Chairman - 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, 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 four potential production centres in Western Australia:
Davyhurst - gold resources
of over 1.5m oz within a 2,000 sq km tenement package and 1.2mtpa gold
processing facility (+1.2Moz historic production)
Riverina Project -
indicated
and inferred gold resources totalling 1.64 million tonnes @ 3.8 g/t Au for
200,000oz.
Mt Ida - resources are
stated as 143,000t at 24.0 g/t containing 110,650oz of gold within four areas -
the Baldock, Whinnen, Meteor and Timoni deposits. Monarch commenced 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’s
premier gold operations (750,000oz historic production)
Mt Magnet – gold
resource of 2.7m ounces, ground package of 330 tenements covering approximately
1,100 square kilometres and a 2.7mtpa capacity gold processing facility.
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.
***
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
