Monarch to spend $11m on exploration in 07-08

One day after acquiring the Riverina gold project, West Perth-based Monarch Gold Mining Company Ltd has committed over $11 million to drilling programs on its Goldfields tenements during the 2007-08 financial year.

According to a company announcement, the program follows promising drilling results from the past three months, and will focus the Davyhurst, Mt Ida, Bellevue and Minjar projects, as well as Riverina.

Monarch has also celebrated the first gold pour at the Davyhurst Mill, aiming to produce 5,000 ounces per month for the next quarter.

Also announced today was the company's divestment of its Goongarrie East project for $50,000 and a 2 per cent smelter royalty.

The 366 sqkm project, sold to West Perth-based minerals explorer Halcyon Group Ltd, is prospective for uranium and nickel, and situated 130 km north of Kalgoorlie.

Halcyon managing director Iggy Tan said the acquisition was a key step in the company's plan to take as more direct role in nickel exploration and production, as well as extending its uranium interests in the area.

Monarch yesterday signed a deal with Riverina Resources Pty Ltd and Barra Resources Ltd, acquiring the Riverina Gold project in a deal worth over $4 million, though the vendors will retain nickel exploration rights.

The full text of the Monarch announcement is pasted below

Monarch Gold Mining Company (ASX/DIXF: MON) has almost doubled its exploration programme on its Goldfields tenements, committing more than $11 million for drilling programmes during the 2008 financial year.

The major exploration program follows extremely promising results from drilling over the past three months, and will focus on the company's Davyhurst, Mt Ida, Bellevue and Minjar projects, along with a new exploration work at the recently acquired Riverina Project.

Monarch Executive Chairman Michael Kiernan said the drilling would expand the company's resource base and create long term value for Monarch shareholders.

"We have reached the milestone of the first gold pour at Davyhurst delivering on our commitment to shareholders. Longer term, it's imperative to continue to deliver increased value through exploration success and maximise Monarch's dominant landholding in the Goldfields region," Mr Kiernan said.

"We have in place a well funded exploration program on regions where there are identified targets to extend our resource base."

Key targets will include:

• Regional drilling at Davyhurst with 44,000m of RC and 60,000m of RAB drilling
• Exploration at Riverina, with 15,000m of RC drilling to upgrade the current resource base
• The high grade shoots within the Timoni mining area, at Mt Ida, to upgrade and expand these resources providing continuity of production to the Davyhurst mill

Mr Kiernan said the Company had been highly encouraged by results from the 2007 drilling program, which had identified potential targets for more detailed testing. He added Monarch had also recently acquired a number of new projects, and had structured exploration programmes to capitalise on previous testing at these tenements.

Monarch provides the following update to shareholders on its exploration program:

Davyhurst
Drilling has focussed on the Round Dam trend (4km from the Davyhurst mill). Results have been excellent, showing extensions to gold resources at Federal Flag (9m @ 3.47 g/t Au, 11m @ 2.28 g/t Au, 15m @ 2.21 g/t Au) and Walhalla ( 26m @ 1.31 g/t Au, 5m @ 10.51 g/t Au, 3m @ 8.12 g/t Au), which may result in enhancing pit designs and gold production.

The potential for new resource discoveries at the Walhalla North prospect, (6m @ 19.21 g/t Au, 5m @ 6.11 g/t Au) and Macedon to Mt Banjo prospects (6m @ 2.85 g/t Au, 3m @ 27.86 g/t Au, 10m @ 1.89 g/t Au) has been confirmed by recent drilling.

At the Sand King prospect infill drilling was completed to confirm the resource model and support the optimised pit. Testing has confirmed the mineralisation and provided better than average grades. Better results include 8m @ 4.88 g/t Au, 2m @ 7.39 g/t Au and 2m @ 8.38 g/t Au.

The Davyhurst exploration budget consists of a commitment to an extensive drilling programme targeting a combination of resource definition and regional drilling with a programme of 44,000m of RC drilling and 60,000m of RAB drilling.

Riverina Project
Recently acquired by Monarch from Riverina Resources Pty Ltd, Riverina covers some 135 km2. It contains Indicated and Inferred gold resources totalling 1.64 million tonnes @ 3.8 g/t Au for 200,000 oz. Monarch will conduct an extensive exploration drilling programme of some 15,000 m of RC drilling to upgrade the current resource base, extend the open pit resources and target new discoveries within the project area.

Mt Ida Project
Monarch recently acquired the 500 sq km tenement package including the historic Timoni Gold Mine, which produced over 265,000 oz of gold.

Underground development is currently in progress from the Timoni shaft to intersect the high grade Baldock shoot. Exploration will focus on the high grade Baldock, Meteor and Whinnen shoots within the Timoni mining area, with drilling planned to upgrade and expand these resources to provide continuity of production to the Davyhurst mill. Regional exploration is currently managed by JV partner, La Mancha Resources Australia Pty Ltd.

Minjar
The Minjar project holds significant potential for base metal discoveries, including nickel and volcanogenic massive sulphide. Monarch's aim is to re-commission the Minjar gold processing facility at an initial production rate of approximately 50,000 oz per annum.

A recent review over the entire project area has outlined a number of priority targets which will form the basis of ongoing gold exploration, in parallel with drill targeting numerous highly prospective prospects. Monarch's objective is to confirm a minimum three year gold reserve inventory.

Monarch has also commenced a review of the base metal potential in the area with the aim of providing base metal targets, to form part of the exploration programme. A number of magnet signatures similar to Golden Grove (Gossan Hill) have been interpreted.

The full text of the Halcyon announcement is pasted below

Highlights

• Halcyon acquires Goongarrie East Project, expanding the Company's uranium and nickel interests in the Goldfields region
• The 366 km2 tenement area, acquired from Monarch Gold Mining Company Ltd, is adjacent to the Halcyon's Lake
• Marmion Uranium Project
• The area is prospective for palaeochannel/sedimentary type uranium mineralization
• In addition, the Goongarrie East Project contains the interpreted northern extension of the ultramafic belt that hosts the Black Swan/Silver Swan Nickel Sulphide Deposits

Halcyon Group Ltd (ASX: HCY) has acquired a promising uranium and nickel exploration project at Goongarrie East, 130 kilometres north of Kalgoorlie.

Managing Director Iggy Tan said today that the acquisition, from Monarch Gold Mining Company Ltd (ASX: MOR), would extend Halcyon's uranium interests in the area - and add a significant new prospect to the Company's nickel portfolio.

"The area is prospective for palaeochannel/sedimentary type uranium mineralisation and contains an interpreted extension of the ultramafic belt that hosts the Black Swan/Silver Swan Nickel Sulphide Deposits," he said.

The northern half of the 366 square-kilometre project abuts the Company's Lake Marmion Uranium Project. This area contains radiometric uranium anomalies and interpreted palaeochannels sourced from the uranium bearing Lake Marmion area. Most of these targets sit within granted tenure and are therefore immediately available for drill testing.

Mr Tan said that the Company had commissioned a gravity survey and a surface sampling program at Lake Marmion. Both programs were due to commence shortly.

"This acquisition will add a significant area of prospective ground to our play for uranium mineralization at Lake Marmion," he said.

"It is a very exciting and potentially valuable acquisition".

"In addition, the southern half of the Goongarrie East Project contains the interpreted northern extension of the same
ultramafic belt that hosts the Black Swan/Silver Swan Nickel Sulphide Deposits".

"The tenure is only 40kms northwest and along strike from the Black Swan/Silver Swan Nickel Sulphide Deposits (170,000 tonnes of Nickel Metal) and only 11kms along strike of the Scotia East (GSP) Nickel Sulphide Deposit (86,000t @ 2% Nickel)".

"The acquired project is another key step in the Company's plan to take a more direct role in nickel exploration and
production".

The Company acquired 100% of 318 km2 of the tenement (all of which is granted) from Monarch Gold Mining Company Ltd for the sum of $50,000 (plus GST) and a 2% Net Smelter Royalty on mineral production. Halcyon recently applied for the remaining 48 km2 of the tenement.