Monarques Gold Corporation (MQR-T) Commencement of diamond drill programs on the 100%-owned McKenzie Break, Swanson and Beacon gold properties
Event: Monarques to drill several projects in the Abitibi.
Impact: Slightly positive. Initial drill programs, well planned by the Monarques technical team, may deliver interesting results.
Analysis
? On May 13, 2020, Monarques announced that it has commenced diamond drill programs on its 100%-owned McKenzie Break, Swanson and Beacon gold properties in the Abitibi, Québec. We understand drilling has started on the McKenzie Break property and shall subsequently move to the Swanson and the Beacon properties, respectively. This drilling follows compilation work and analysis of new exploration opportunities. Recall Monarques is an emerging gold mining company focused on becoming a 100,000 to 200,000 oz Au per annum gold producer through its portfolio of projects covering 33,000ha in the Abitibi mining camp of Québec with, namely, the Wasamac, Fayolle, Croinor, Beacon, McKenzie Break and Swanson advanced projects.
? Revisiting McKenzie Break: The McKenzie Break project is located 25 km north of Val-d’Or, and in the fall of 2019, a total of 4,202m were drilled >10 holes with gold mineralization (please see: https://www.dhirubhai.net/posts/eric-lemieux-9468715_quebec-abitibi-exploration-activity-6638786239849910272-DWVo and https://www.dhirubhai.net/posts/eric-lemieux-9468715_monarques-gold-corporation-mqr-t-on-february-activity-6638549561541562368-01Gs). A new program is planned to extend gold mineralization from hole MK-19-250 (11m @ 10.50 g/t Au) with 3 new holes at 50-metre spacing to the east, south and west. Another hole is planned 50m east of hole MK-19-249, which returned 13.7m @ 5.28 g/t.
? Blue sky holes to be drilled on Swanson and Beacon: The Swanson project is located ~45 km north of Val-d’Or and also at trucking distance from Monarques Camflo and Beacon mills. The target is a geophysical magnetic high along the same geological stratigraphy as the Swanson and Manville deposits where a mineral resource estimate completed in 2018 suggest an indicated resource of 1,752,100 t @ 1.85 g/t Au (104,100 oz Au) and an inferred resource of 74,000 t @ 2.96 g/t Au (7,100 oz Au). The property has seen limited drilling and Monarques intends to drill one hole across the magnetic high conductor. At Beacon, located ~12 km from downtown Val-d’Or and within the Bourlamaque batholith, a drill hole is planned to intersect a favourable NE trending structural fault zone that cuts across the northern part of the property 900m from the Beacon Mill and 5km south of Monarques Beaufor Mine (see: https://www.dhirubhai.net/pulse/monarques-gold-corporation-mqr-t-secures-strategic-advance-lemieux/).
Important Disclosures
Monarques Gold Corporation
V The Mining Analyst has visited material operations of this issuer, namely the Fayolle project.
R This issuer has indirectly paid the Mining Analyst.
Update - May 14, 2020:
Providing toll milling options for Wasamac:
Glencore's Kidd Metallurgical Site (Met Site) near Timmins could process eventual potential ore from the Wasamac property. The Met Site was built in 1966 with numerous upgrades performed over the years. With a capacity to process 12,500 tpd, the concentrator currently handles metal ore to produce copper and zinc concentrates.The signing of a memorandum of understanding (MOU) with Glencore for the potential use of the Kidd Creek concentrator would imply transporting ore west to Timmins via CN Rail and Ontario Northland Railway. According to the terms of the MOU, Monarques shall fund an upgrading study by December 31, 2020.
Update - May 20, 2020:
Excellent Results From New Tailings Study On The Wasamac Gold Project:
Wasamac tailings are non-potentially acid generating (non-PAG), with very little to no tendency to generate net acidity. Moreover, they show that the tailings contain excess capacity to neutralize acid from external sources tributary to the abundance of calcium- and magnesium-carbonate minerals in the ore and tailings. Representing hence an effective neutralization potential to consume any acid produced by the oxidation of the sulphide mineral, pyrite, that may be present in the ore and tailings.
Wasamac tailings should be significantly less harmful to the environment than if they were acid-generating and have the potential to neutralize acid making them attractive to other regional mills.
Update - June 1, 2020:
Monarch Gold Sells Fayolle To IAMGOLD For $11.5 Million
https://www.monarquesgold.com/news-releases/monarch-gold-sells-fayolle-to-iamgold-for-11-5-million
On June 1, 2020, Monarques disclosed it had entered into an agreement to sale its Fayolle property to IAMGOLD Corporation (IMG-T) for a total consideration of $11.5M. The Fayolle property consists of 39 mineral claims covering an area of 1,373ha in Aiguebelle and Cléricy townships, ~ 35 km northeast of Rouyn-Noranda, Québec. Recall Fayolle was bought in August 2019 for a total of ~5.7M (https://www.monarquesgold.com/news-releases/monarch-gold-announces-the-closing-of-the-fayolle-gold-deposit-acquisition).
IAMGOLD shall pay Monarques a total amount of $11.5M ($9.7M shares of IAMGOLD to for a total value of $9.7M and $0.3M cash payment upon transfer of ownership of a parcel of land and a $1.5M cash payment 90 days after the initial transport of ore from the Fayolle deposit). Evidently a profitable short-term transaction for Monarques as it allows to strengthen its financial position without dilution and advance the flagship Wasamac project as well as exploration programs at the Beaufor and McKenzie Break properties.
Recall on April 30, 2020 Monarques reported assay results from the first of seven geotechnical holes in its 2019-2020 diamond drilling program. The drilling program that started in December 2019 had a total of 1,166m drilled in the 7 holes and 8 shallow overburden/rock mechanics holes totalling 133m. The Fayolle property is located in the Abitibi greenstone belt in the Abitibi West subprovince and underlain by a basalt-komatiite-rhyolite sequence with porphyritic dykes and locus of structural imbrication zone involving the Manneville North, Manneville South and La Pause faults along a strike length of more than 3km. Wide alteration zones (Fe-carbonate-sericite) contain brecciated gold mineralized zones totalling ~110,000oz Au.
Update - June 11, 2020:
Yamana Gold Invests In Monarch Gold
https://www.monarquesgold.com/news-releases/yamana-gold-invests-in-monarch-gold
Closing of a $5,419,800 private placement with Yamana Gold Inc. (YRI-T) ($4.2M), Alamos Gold Inc. (AGI-T) ($0.72M) and other investors, @ $0.24 per share and warrants, @ $0.29 until June 10, 2023. Saliently, Yamana Gold will be entitled to participate in future financings to maintain its new 5% interest in the company. Yamana shall also be entitled to name a representative to the Board of Directors of Monarques. The company's overall financial position now stands at more than $25M, which should allow to advance the development of the Wasamac, Beaufor, McKenzie Break and Camflo NW gold projects, among others.
Update - June 18, 2020:
Monarques Gold Begins Vast Data Compilation Program At Its Camflo Gold Property, Barrick Gold’s Original Asset
Monarques to reactivate its well located Camflo NO project. Monarques announced that it shall be undertaking a vast, detailed compilation and 3D modelling program on its Camflo property located in the heart of the Abitibi just north of the Canadian Malartic Mine. The work shall include a high-resolution helicopter-borne magnetic survey of the property. The Camflo property, which includes the old Camflo mine and the fully permitted Camflo mill, consists of 38 mining claims and 1 mining concession covering a total area of 948 ha.
Camflo Mines discovered the Camflo deposit in 1962 and was acquired by Barrick Resources (later renamed American Barrick) in 1984. The Camflo mine was in production for 27 years, from 1965 to 1992, and yielded a total of 1.65M oz. Au from 8.8Mt @ 5.78 g/t Au. The Camflo Mill has crushing and grinding circuits as well as a Merrill-Crow concentrating circuit that uses cyanidation and zinc powder precipitation for gold recovery. The Camflo Mill was built in 1969 and upgraded to its current capacity in 1975. The mill capacity is 1,600tpd and is permitted for custom milling. Richmont bought the mill in 1993 to process ore from the Francoeur Mine near Rouyn and then process ore from the Beaufor Mine near Val Senneville (Val d'Or).
Update - July 9, 2020:
Monarques Gold Signs MOU With Ontario Northland For Wasamac
Monarques Gold announced that it has entered into a memorandum of understanding with Ontario Northland Railway for the transportation of eventual ore from its Wasamac gold project to the Kidd concentrator in Timmins, Ontario. The agreement shall allow negotiation of a favorable rate for the transportation of material from the Wasamac gold project to the Kidd concentrator under the MOU with Glencore Canada of May 14, 2020. The Ontario Northland Railway serves northern Ontario and northern Quebec, running directly past Wasamac to end its route at Rouyn-Noranda, after which the line becomes CN property east of Rouyn-Noranda. Getting flexibility.
Update - July 23, 2020:
Monarques Gold Intersects 13.95 G/T Au Over 14.35 Metres At Mckenzie Break
On July 23, 2020, Monarques disclosed high-grade assay results from its winter/spring 2020 diamond drilling program on its 100%-owned McKenzie Break gold project, located ~25 km north of Val-d’Or (proximal to Monarch’s Camflo and Beacon mills). The 1,896 m drilling program was completed in May and the assay results of the 4 four holes in the central part of the property suggest expansion of new zones below to the SE of the current resource estimate footprint.
Results from hole MK-20-255 indicate the continuity of the “Number 12” vein and the discovery of a new stacked vein system at depth. The initially targeted Number 12 vein returned 13.95 g/t Au over 14.35 m, including 25.4 g/t Au over 0.85 m, 311 g/t Au over 0.5 m and 15.1 g/t Au over 1 m (residual of 12m @ 0.67 g/t Au).
We had estimated an average grade x thickness metric of 14.57 g/t Au x m for the 2018-2019 drilling (~71 holes), new results improve this metric. Recall the project straddles the eastern extension of the prolific Destor-Porcupine Break. A 4,000-m follow-up drilling program is planned.
Update - August 5, 2020:
Monarques Gold now trading on the OTCQX Market
https://www.monarquesgold.com/news-releases/monarch-gold-commences-trading-on-the-otcqx-market
On August 5, 2020, Monarques disclosed that the Corporation has qualified to trade on the OTCQX? Best Market and began trading on OTCQX under the symbol “MRQRF”. Monarques upgraded to the OTCQX market from the Pink? market. Upgrading to the OTCQX Market is an important step for companies seeking to provide transparent trading for their U.S. investors. To qualify for OTCQX, companies must meet high financial standards, follow best practice corporate governance, and demonstrate compliance with applicable securities laws.
This is another important milestone for Monarques, which shall expand the shareholder base to a larger pool of retail and institutional investors in the US and facilitate the trading of its shares.
Update - August 25, 2020:
Monarques Gold Announces Upsize to Previously Announced Bought Deal Private Placement of Flow-Through Units to $10 Million
On August 25, 2020 MONARCH GOLD CORPORATION ("Monarques Gold") announced that as a result of the strong demand for its previously announced Offering, it has entered into an amended agreement pursuant to which Stifel GMP and Sprott Capital Partners LP, as co-lead underwriters and joint bookrunners, have agreed to purchase, on a "bought deal" private placement basis: (i) 6,945,000 Québec flow-through units of Monarques at a price of $0.72 per Québec FT Unit, and (ii) 8,772,000 flow-through units at a price of $0.57 per Unit, for aggregate gross proceeds of $10,000,440.
The gross proceeds shall be used by Monarques to incur eligible "Canadian exploration expenses" that qualify as "flow-through mining expenditures" as both terms are defined in the Income Tax Act (Canada) related to the Wasamac and McKenzie Break projects in Québec.
The Offering is scheduled to close on or about September 17, 2020 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the conditional approval of the Toronto Stock Exchange.
Update - September 10, 2020:
Monarch Gold To Assess Wasamac Property Silver Potential
https://www.monarquesgold.com/news-releases/monarch-gold-to-assess-wasamac-property-silver-potentialt
On September 10, 2020, Monarques disclosed that it is undertaking an internal review of its Wasamac project in Québec to ascertain the silver content associated with the current 1.76M oz. gold mineralization reserves.
With the significant strengthening of the silver market (prices up 44% in the last year), Monarques views that in light that previous drill campaigns that identified certain high-grade silver intersections (Richmont Mines, 2012 drilling program), the analysis of the silver potential at Wasamac was limited as no credit for silver had been considered in the 2018 Wasamac feasibility.
The 2018 Wasamac feasibility report stated that metallurgical testwork and drill core assays had shown that all mineralized zones at Wasamac contain variable amounts of silver, but that silver had not been estimated in the mineral resources nor incorporated in the mine plan or economic analysis. The available data suggest that Zones 1 and 2 have a high proportion of silver. Silver mineralization is associated with the gold-rich sections with values up to 75.9m @ 7.01 g/t Ag and 10.2m @ 10.72 g/t Ag. The reported table of for the 11 best silver intersections suggests an average grade of 8.06 g/t Ag and 3.62 g/t Au for a 0.45 gold/silver ratio and adds 0.1 g/t Au on a Au Eq basis.
The review shall consist of the identification of intervals for resampling, analysis of the silver grades to determine the distribution of silver within the zones, and construction of a silver model, in order to better define the silver content of the Wasamac deposit.
Update - September 15, 2020:
Monarch Gold Provides Update on the Camflo Property
https://www.monarquesgold.com/news-releases/monarch-gold-provides-update-on-the-camflo-property
Monarques announced that it has received the final results from the helicopter airborne magnetic (MAG) survey conducted on its behalf by Novatem Inc. on the Camflo property. Recall on June 18 Monarques reactivated the Camflo NO project (see press release dated June 18, 2020). Given that Camflo Mines discovered the Camflo deposit while drilling distinct magnetic features in 1962, Monarques decided to conduct a detailed helicopter airborne MAG survey over the property at a 25-m line spacing in a bid to identify fold features similar to the one hosting the Camflo stock and mineralization along the southern limb of a larger, more regional fold. The MAG survey was successful in outlining the folded iron formation associated with the mineralization at the Camflo mine, as confirmed by underground work at the mine. It also identified potential targets to the SE, defined by a similar fold feature along the same stratigraphy as well as 2 additional potential fold features to the NW of the mine. A preliminary compilation of historical surface drill holes by Monarch geologists has identified a syenite intrusion intersected in 2 holes drilled in 1962, located ~800 m to the SE, along the stratigraphic horizon that hosts the Camflo stock.
As a next step, Monarques shall undertake a detailed compilation of historical data from the Camflo property, this is to include all historical works, drifts, sub-levels, shafts, stopes and other underground openings. The compilation should include 3,000 surface and underground diamond drill holes drilled from 1939 to 2007. Monarques has retained the services of InnovExplo of Val-d'Or to undertake the digitization of all information in regards to lithological contacts, geological structures and mineralized zones contained in the level plans and cross sections as well as mine openings used for mine production in order to reconstruct the underground infrastructures in 3D. A 3D litho-structural model should help improve the understanding of the deposit and generate quality exploration targets.
Update - September 24, 2020:
Monarch Gold Reports Its Fourth Quarter Results For Fiscal 2020
On September 24, 2020 Monarques reported its results for the fourth quarter ended June 30, 2020. Progress made on the Wasamac, McKenzie Break and Beaufor projects and much focus to be put on the development of the flagship Wasamac project. Monarques is currently active also on the Beaufor and McKenzie Break projects, carrying out diamond drill programs.
Monarques sold the Fayolle, Monique, Simkar, Regcourt and Louvem non-core projects. The strategy of acquiring undervalued gold properties paid off as the rising gold market allowed Monarques to sell these assets at a good profit margin.
Monarques has ~ $35M in cash and cash equivalents, including investments.
Update - November 2, 2020:
Monarques Gold Announces Friendly Acquisition Agreement With Yamana Gold
On November 2, 2020, Monarques announced that it had entered into a definitive agreement with Yamana Gold Inc. pursuant to which Yamana shall acquire the Wasamac property and the Camflo property and mill through the acquisition of all of the outstanding shares of Monarques (not already owned by Yamana) for total consideration of ~$200M (or C$0.63 per share on a fully diluted basis). Under the plan of arrangement, Monarques shall complete a spin-out to its shareholders, through a newly-formed company, its other mineral properties (namely the Beaufor mine, the Croinor, McKenzie Break and Swanson properties, and the Beacon mill) as well as certain other assets ($14M cash) and liabilities having an implied value of ~$47.5M. The total consideration to be paid by Yamana to the shareholders of Monarques is ~$60.8M in cash and ~$91.2 M in Yamana shares.
Under the terms of the transaction, Monarques shareholders shall receive C$0.63 per share, comprised of i) 0.0376 of a Yamana share (valued at $0.288); ii) $0.192 in cash; and iii) 0.20 of a share (valued at $0.15) of SpinCo (with each full share having a value of C$0.75 per share), the newly-created exploration company that shall hold Monarque’s remaining pipeline of development and exploration projects. We estimate a $125 per oz acquisition metric metric.
Following the completion of the transaction, Monarques Shareholders shall own ~1.3% of Yamana and 100% of SpinCo, and Yamana will own 100% of Monarques.
The transaction adds the Wasamac project to Yamana’s Canadian exploration portfolio. Wasmac is located 15 km west of Rouyn-Noranda in the Abitibi region of Québec, ~100 km from the Yamana’s 50%-owned Canadian Malartic mine. The Wasamac project has existing proven and probable mineral reserves of 1.8 M oz. @ 2.56 g/t Au supported by a Feasibility Study completed in late 2018. Wasamac consists of 5 well developed ore shoots within a single, continuous shear zone with a consistent grade distribution and wide mining widths, making it amenable to simple, productive, and cost-efficient underground bulk mining methods. The geological characteristics of the Wasamac ore body suggest it holds the potential to be an underground mine achieving the same scale, grade, production, and costs as Yamana’s successful Jacobina mine in Brazil, and it possesses many parallels to the 50%-owned Canadian Malartic Odyssey Underground Project (https://canadianmalartic.com/en/about-us/projects/). The Camflo property, located ~15 km NW of Val-d’Or, includes the old Camflo mine, which closed in 1992, and a centrally located permitted mill. The Camflo property has not been explored since the mid-1980s and likely has good exploration upside.
The strategic rationale is that the acquisition provides Yamana with a high-quality project with a significant mineral reserve and mineral resource base as well as excellent potential for further expansion of Yamana’s pipeline of organic opportunities.
The Transaction has been approved by the Boards of Directors of Monarques and Yamana and shall require, among other things, the approval of at least 66 2/3% of the votes cast by Monarques shareholders at a special meeting of shareholders. The companies are working towards closing the Transaction during 2020 and not later than early January 2021. Recall the Wasamac and Camflo assets were acquired from Mines Richmont for ~$25M in shares in October 2017. We note that Metalla Royalty & Streaming Ltd. (MTA-V) own a 1.5% NSR royalty (subject to a 0.5% buyback) on Wasamac and a 1% NSR on the Camflo property (https://www.metallaroyalty.com/wasamac/).
Update - December 30, 2020:
Monarques Gold Announces Securityholder Approval Of The Arrangement With Yamana Gold
https://www.monarquesgold.com/news-releases/monarch-gold-announces-securityholder-approval-of-the-arrangement-with-yamana-gold
On December 30, 2019, Monarques Gold announced securityholder approval of the arrangement with Yamana Gold. Recall on November 2, 2020, Monarques had announced that it had entered into a definitive agreement with Yamana Gold Inc. pursuant to which Yamana acquired the Wasamac and Camflo properties through the acquisition of all of the outstanding shares of Monarques (not already owned by Yamana) for total consideration of ~$60.8M in cash and ~$91.2 M in Yamana shares (or C$0.63 per share on a fully diluted basis).
Shareholders approved by 99.92% of the votes cast the resolution authorizing the plan of arrangement under the Canada Business Corporation Act. Under the Arrangement, Monarch shall first complete a spin-out to its Shareholders through a newly-formed company, SpinCo (Monarch Mining Corporation), which shall hold the remaining pipeline of development and exploration mineral projects (Beaufor mine, the Croinor, McKenzie Break and Swanson properties, and the Beacon mill) as well as certain other assets (($14M cash) and liabilities (implied value of ~$47.5M) of Monarch.
The implementation of the Arrangement remains subject to the final approval of the Superior Court of Québec scheduled for January 20, 2021, among other. The common shares of SpinCo should commence trading on the Toronto Stock Exchange (the “TSX”) under the symbol “GBAR”. Following the completion of the transaction, Monarques Shareholders shall own ~1.3% of Yamana and 100% of SpinCo.
Also, Jean-Marc Lacoste, Michel Bouchard, Yohann Bouchard, Guylaine Daigle, Laurie Gaborit and Christian Pichette were re-elected as the directors of Monarques.
Update - January 20, 2021:
Monarch Gold Receives Final Court Approval For The Plan Of Arrangement With Yamana Gold
On January 20, 2021, Monarques announced that the Superior Court of Québec has issued a final order approving the previously announced arrangement governed by the Canada Business Corporations Act pursuant to which Monarques shall transfer certain mineral properties and other assets and liabilities to a newly formed Monarch Mining Corporation entity and Yamana Gold Inc. shall acquire the Wasamac property and the Camflo property and mill by acquiring all of the issued and outstanding shares of Monarques (not already owned by Yamana) on a fully diluted basis. The common shares of new Monarch Mining Corporation shall begin trading on the Toronto Stock Exchange under the symbol GBAR in the coming days.
Writer & Editor | The Calandra Report | ThomCalandra.com
4 年Expecting several events with Monarques at the lead for both production and exploration in Québec. Thank you for the report! TC