Monarch Mining Approaches Significant Milestone
Monarch Mining (TSX: GBAR) is delivering on a promise.
In the fall of 2021, Monarch restarted operations at their flagship Beaufor gold mine in Abitibi Quebec. Just a short time later, they are about to follow through on a key goal as they prepare to pour their first gold bar – an event that is likely to be a game changer for the company.
“We're just about to become a producer,” Jean-Marc Lacoste, President and CEO of Monarch Mining declared. “In this day and age there are fewer and fewer companies that get to that level, and we did. By producing ounces, we’ll be generating positive cash flow, which makes us much stronger than exploration companies, companies that often seek money to explore for many years before they get to see some cashflow coming from operations.”
Much of the company’s production capability will depend on how efficiently they can extract gold from their mine, a process they have greatly improved since making some significant capital improvements.
The mine now has two access points consisting of an elevator shaft and a ramp for trucks. Together they improve flow inside the mine and allow the company to produce more gold faster. “This was the reason why we were able to restart this mine,” Lacoste explained. “We had a bottleneck when we only had the shaft. Now, with the addition of the ramp, we'll be able to take out more than 750 tons per day, which is the current capacity of our mill.”
That capacity will be put to good use serving a mine that has produced 1.2 million ounces of gold over the last 30 years. Production was stopped three or four years ago so Monarch could improve operational efficiencies. Now the mine is back online and ready to help realize what the company sees as the perfect scenario, where gold rocks are extracted from the mine and are brought directly to the company’s mill so they can be processed into gold bricks. It’s a scenario that will put Monarch in the company of other producers such as Wesdome Gold Mines Ltd. (TSX: WDO).
But keeping this kind of positive momentum going will require continued growth according to Lacoste. “It’s important for a producer to always put money back to work in order to grow the size of a resource. So, Monarch will be spending more than $10 million this year. The bulk of it will be on the Beaufor mine to extend its life well past the current estimate of five years.”
Beyond the expansion of the company’s flagship mine, Monarch is counting on the development of three other well-advanced assets that together total close to three-quarters of a million ounces in inventory. Ultimately, they will help the company achieve its goal of producing 100,000 ounces of gold a year.
“We're building the company so we can be producing gold for many years to come,” Lacoste said confidently. “We have a future ahead of us. We're here to stay as a producing gold company.”
The company’s long-term prospects are further enhanced by the fact that their 300 square kilometers of property is situated in one of the world’s most desirable mining regions. “Like the American gold rush in the west, Abitibi was born from a Canadian gold rush back in the early 1900s. Many of the biggest gold producers in the world right now started in Abitibi. Barrick's first asset was in Abitibi. Agnico Eagle, IAM Gold, Eldorado, all started there. All told, the region has produced more than 120 million ounces of gold over the last century. So most of the gold on earth right now has a little Canadian flag on it.”
Given Monarch’s built-in geographical advantage, Lacoste sees an opportunity to create some significant value. His first goal of becoming a producer is about to be realized. He’s hopeful the company can reach 40 to 50,000 ounces per fiscal year starting this year. The ultimate goal is to produce 100,000 ounces of gold each year so they can rival some of the bigger producers in the world, or, become a target for those very same producers.
Judging from his track record, Lacoste is a capable CEO who can make this happen. He started in the mining industry in 2004 when he became the CEO of Golden Goose Resources. He built a great asset that was successfully sold to Argonaut Gold for $350 Million in 2012. Then he became the CEO of Monarch Gold. After seven years he sold that company to Yamana Gold for 200 million. In both cases, he helped create significant value for shareholders. Now he’s looking to do it again with his most recent company, Monarch Mining.
“You need three conditions to successfully invest in a company like ours,” he advises. “You need to have management with skin in the game. I personally own more than a million shares of Monarch Mining Corp. You need to know that the company has future blue sky projects to ensure its growth and longevity. And finally, you need a company with tight float. We know all our shareholders. I can produce a majority vote for Monarch with ten phone calls. There's ten people that own more than 50% of the company. It's a very tightly held corporation, so when we announce great news, it automatically translates into the stock.”
The way Lacoste sees it, Monarch has a business plan that will deliver for investors. “We have a fully functioning mine that is currently in operation. We have a fully functioning mill that is about to pour its first gold bar, and we have three advanced gold projects cued up to offer growth potential for many years to come. We're advancing to a higher level of gold producers. You should be a shareholder before this happens - before everybody talks about it.”
You can follow Monarch’s progress on the TSX under the appropriate ticker symbol, GBAR.
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