West Perth-based Monarch Gold Mining Company has acquired tenements surrounding its Mt Ida Gold Mine project for $5 million from West Perth's International Goldfields Ltd.
West Perth-based Monarch Gold Mining Company has acquired tenements surrounding its Mt Ida Gold Mine project for $5 million from West Perth's International Goldfields Ltd.
The company also announced it would close a non-renounceable rights issue on June 14, after 300 shareholders did not receive prospectuses with their entitlements form.
Monarch aimed to raise up to $19.5 million for development, acquisitions and refurbishment of its Davyhurst mine plant.
The company issued 78.2 million shares at 25 cents each to raise the money, with shares to be allocated on a one for four basis.
Monarch, which aims to be a 500,000 ounce gold producer by December 2009, made a secondary listing earlier this year on the Dubai International Financial Exchange, and also recently completed a placement of 28 million shares to institutional investors - who will be eligible for this rights issue.
Ernst & Young will act as auditor to the company, while legal services are provided by Allens Arthur Robinson.
The offer is not underwritten.
Company chairman Michael Kiernan advised he would be taking up his full entitlement in the offer.
The full text of a Monarch announcement is pasted below
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 that mining at Davyhurst has commenced today.
"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
The full text of an International Goldfields announcement is pasted below
Australian resources company International Goldfields Limited (ASX: IGC) has sold the Mt Ida gold mine, near Kalgoorlie in Western Australia, to Monarch Gold Mining Company Limited (Monarch) for A$5m.
Under the terms of this transaction Monarch will pay IGC:
- $50,000 on execution on the agreement
- $2.5m on the settlement date (6 July 2007)
- The balance by 31 December 2007
The sale agreement consists of a tenement package at Mt Ida that is subject to a Farm-In and Joint Venture Agreement with IGC and La Mancha Resources. La Mancha have a 51% farm in right on all gold discovered by way of spending A$7.5 million on gold exploration at the Mt Ida project over a five year period.
Earlier this year IGC sold the Meteor, Whinnen, Baldock and Timoni ore bodies, together with associated mine and camp infrastructure, plant and equipment established by the Company at Mt Ida, to Monarch for A$2.3m
IGC executive chairman Tony Sage said the Company considered the decision to sell the remaining stake in Mt Ida as key to the Company's strategy of focusing its resources on the exploration and development of the recently acquired farm in rights to the Genorah Farms platinum project in the Bushveld region of South Africa.
"The Board of IGC believes the aggressive exploration and development of the world-class Genorah Farms project should be a priority for the company, particularly in light of the exploration potential, increased demand and significant increase in platinum prices."
"As a company we need to allocate our resources, both time and money, to the projects we think are most likely to add value to our shareholders in the mid to long term," Mr Sage added.
"We think the selling of this asset will provide a significant financial benefit to the company as we look to prove up the resource potential at Genorah Farms in the shortest possible timeframe.
The Company also advises of the resignation of Charles Mostert from the Board.
