Monarch to raise up to $10m in SPP ahead of mining start

West Perth-based gold explorer and developer Monarch Gold Mining Company Ltd, has announced plans to raise up to $10 million through a share purchase plan, before the company starts mining in May this year.

The company will issue up to 20,000 shares to eligable shareholders at 24c each, with the company aiming to raise a minimum of $2.5 million to fund a refurbishment of the mine and future exploration.

Monarch chairman Michael Kiernan bought almost 14 million shares for more than $3 million on-market last month, bringing his interest in the company to 32.5 million shares and 10 million options.

The full text of a company announcement is pasted below

Monarch Gold Mining Company Ltd today announced the issue of a Share Purchase Plan Prospectus to provide eligible shareholders the opportunity to increase their holding at an attractive price. This is announced at a time when Monarch is nearing the commencement of operations at its Davyhurst Gold Mine and the Company expects to transition from an explorer to a gold producer.

"The Board believe it is important for all shareholders to have an opportunity to invest in the Company as we complete our planning process and before we move into production. Monarch is due to complete its mine planning later this month and is poised to take advantage of the current firming of the gold price as it nears USD$650," Chairman Michael Kiernan commented.

Monarch plan to start mining at Davyhurst in May 2007 and producing gold in July 2007, which will be the first of what is hoped to be three or four gold projects.

Monarch has chosen to offer shareholders the ability to purchase up to $4,800 of fully paid shares at the price of 24 cents per share. This is a good discount to the current trading price and the volume weighted average price of the Company's shares in the five trading days prior to the announcement.

The Share Purchase Plan Offer Prospectus will be lodged with the Australian Securities and Investments Commission today.

Mr Kiernan added he believed the opportunities in front of Monarch are extraordinary and looked forward to the company's future with much enthusiasm.