Montreal, Quebec, Canada, September 27, 2022 – MONARCH MINING CORPORATION (“Monarch” or the “Corporation”) (TSX: GBAR) (OTCQX: GBARF) reports today that it has suspended its operations at the Beaufor Mine due to financial and operational challenges. The mine will be put on care and maintenance for an undetermined period.
As reported on August 31, the slower ramp-up of the Beacon mill following a number of mechanical and procurement issues, as well as problems with the grade reconciliation of the material stockpiled, caused cash restrictions and forced the Corporation to slow down its mining activities at Beaufor.
Following a review of its operations, the Corporation received confirmation of continuing significant discrepancies between the reported grade of the material mined at Beaufor and the grade of material processed at the Beacon Mill, which is causing continued lower cash flow from operations than expected and generating insufficient funds for the Corporation to continue its operations.
The Corporation intends to continue to process the estimated stockpile of 20,000 tonnes to generate funds prior to placing the Beacon Mill on care and maintenance. In addition, the Corporation is planning to start a complete review of identified issues, including stockpile management and its mining methods in finding solutions to resolve the dilution issues.
The Corporation has started a strategic review of its assets and operations. Monarch is currently working closely with its lenders, suppliers, customers and potential investors to develop a strategy to fund its activities.
“The decision taken today by the Board and management was after careful consideration of all available information from the mine and mill operations, and the Corporation current and projected financial situation. We understand that this situation is difficult for our shareholders, employees and stakeholders,” said Jean-Marc Lacoste, President and Chief Executive Officer of Monarch. ‘’We will continue to work towards resolving the present situation at the operations while seeking strategic and financial alternatives to maximize stakeholder value.”
Monarch Mining Corporation (TSX: GBAR) (OTCQX: GBARF) is a fully integrated mining company that owns four projects, including the Beaufor Mine, which has produced more than 1 million ounces of gold over the last 30 years. Other assets include the Croinor Gold, McKenzie Break and Swanson properties, all located near Monarch’s wholly owned 750 tpd Beacon Mill. Monarch owns 29,504 hectares (295 km2) of mining assets in the prolific Abitibi mining camp that host a combined measured and indicated gold resource of 666,882 ounces and a combined inferred resource of 423,193 ounces.
Some of the statements in this news release may constitute "forward-looking information" as defined under applicable securities laws. All information contained in this news release, other than statements of current and historical fact, is forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “budget”, “guidance”, “scheduled”, “estimates”, “forecasts”, “strategy”, “target”, “intends”, “objective”, “goal”, “understands”, “anticipates” and “believes” (and variations of these or similar words) and statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” “occur” or “be achieved” or “will be taken” (and variations of these or similar expressions). All of the forward-looking information in this news release is qualified by this cautionary note. Forward-looking information is not, and cannot be, a guarantee of future results or events. These statements reflect Monarch’s current expectations of future revenues and business prospects and opportunities and are based on information currently available to Monarch. Monarch cautions that actual performance will be affected by a number of factors, many of which are beyond its control, and that future events and results may vary substantially from what Monarch currently foresees. Factors that could cause actual results to differ materially from those in forward-looking statements include risks and uncertainties described in Monarch’s annual information form filed with the Canadian Securities regulators on SEDAR (www.sedar.com) on December 1, 2021. Risk factors that could cause actual results to differ materially from those predicted herein including but not limited to: timing and anticipated cost of care and maintenance activities at the Beaufor Mine, inherent hazards associated with the operation and closure of mining projects, volatility in financial markets or general economic conditions; capital requirements and the need for additional financing, unanticipated changes in production, mineral reserves and mineral resources and the related grades, metallurgical recoveries and loss of key personnel. Although Monarch has attempted to identify important factors that could cause its actual results, performance or achievements to differ materially from those described in the forward-looking statements, there are other business risks and hazards associated with mineral exploration, development and mining that cause its results, performance or achievements not to be as anticipated, estimated or intended. Although Monarch believes that the forward-looking information contained herein is based on reasonable assumptions (including assumptions relating to economic, market and political conditions, requirements readers cannot be assured that actual results will be consistent with such statements. Monarch expressly disclaims any intention or obligation to update or revise any forward-looking information in this news release, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.