Monarch Gold Mining Company Ltd has suspended mining activities at its Davyhurst open pit mine due to continued underperformance.
Over the immediate future the Company will review whether to undertake definitional drilling to review and verify geological data received from the various project acquisitions or dispose of the project.
All creditors will be paid in full in the normal course of business.
The Company further advises that the Mt Ida high grade underground operation will continue and
operate on a toll treatment of ore basis.
Mt Ida is drawing close to full development and the production forecast for the first half financial year 2008/09 is projected to produce 19,900 ounces at an average cash cost of AUD$543 per ounce.
Second half 2008/09 the forecast is for 25,000 ounces at an average cash cost of AUD$431 giving a full 12 months forecast of 44,900 ounces at an average cost of AUD$480 per ounce.
It is proposed to substantially increase exploration over the next 12 months at Mt Ida with a target to double resources thereby allowing for increased production and extended mine life.
With regards to the Mt Magnet Gold Project acquisition the Company still wishes to proceed with the purchase however have commenced discussions with Harmony Gold (Australia) Pty Ltd to endeavour to defer settlement for a period of time.
The Company proposes to maintain the trading halt until these negotiations are concluded at which time the Company will outline its strategy for going forward.
Shares in the company were last trading at 29.5c.
