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Beaufor Mine

Over 1.1 million ounces of gold produced and strong exploration potential

Monarch holds a 100% interest in the Beaufor Mine, which consists of three mining leases, one mining concession and 23 mining claims covering an area of 5.9 km2. The mine is located approximately 20 kilometres northeast of the town of Val-d'Or, in Abitibi-East Township, in the province of Quebec. The Beaufor Mine is an underground mine.

On June 27, 2019, production activities at the Beaufor Mine were suspended and the mine was placed under care and maintenance.

On June 3, 2021, Monarch announced that it planned to reopen the Beaufor Mine and Beacon Mill by June 2022.

Recommissioning

Monarch’s decision to resume production was primarily based on positive drill results, the prevailing gold market, the proposed production strategy and access to financing. The new production strategy is to operate the Beaufor Mine via two accesses, the production ramp and the shaft, whereas historically production had taken place via the shaft only.

In preparation for recommissioning, some 24,000 tonnes of ore have been mined and set aside for the Beacon mill. Waste material will be processed first to ensure that the mill is running properly, after which the mill will begin processing the ore ahead of the first gold pour, scheduled for June 2022.

Exploration

In June 2020, the Company initiated a 42,500-metre diamond drilling program to test two types of targets: areas around historical high-grade intersections near existing underground infrastructure, and isolated resource blocks, which are generally defined by a single drill intersection. Such near-mine exploration targets can be tested from the existing underground workings, typically with holes less than 200 metres long.

In 2022, Monarch drove an exploration drift with drill bays at the lowest level of the mine (~900 m) so that it could test the continuity of the mineralized zones at depth.

As at May 11, 2022, 283 holes totalling 47,038 metres had been drilled during the exploration and definition program. Given the positive results, additional drilling is currently underway to allow resources to be converted to reserves and included in a future mine plan.

The exploration and definition drilling program is ongoing, with five drill rigs currently working underground. Monarch is planning to drill a total of 25,000 metres in 2022.

Resources

Mineral resource estimate table
Mineral resource estimate notes:
  1. The independent qualified person for the 2021 MRE, as defined by National Instrument (“NI”) 43-101 guidelines, is Charlotte Athurion, P.Geo., of BBA Inc. The effective date of this MRE is July 23, 2021.
  2. These mineral resources are not mineral reserves as they do not have demonstrated economic viability.
  3. The mineral resource estimate follows CIM definitions (2014) for mineral resources.
  4. Results are presented diluted and considered to have reasonable prospects for economic extraction. Isolated and discontinuous blocks above the stated cut-off grades are excluded from the mineral resource estimate. Must-take material, i.e. isolated blocks below cut-off grade located within a potentially mineable volume, was included in the mineral resource statement.
  5. The resources include 166 mineralized zones with a minimum true thickness of 2.4 m using the grade of the adjacent material when assayed or a value of 0.00025 when not assayed. High-grade capping varies from 20 to 65 g/t Au (when required) and was applied to composited assay grades for interpolation using an Ordinary Kriging interpolation method (ID2 for 96_01, 96_02, 20 zones, 21_01, 140, 367 and 350 zones) based on 1.5 m composite and block size of 5 m x 5 m x 5 m, with bulk density values of 2.75 (g/cm3). A second capping was applied for the second and third passes in order to restrict high-grade impact at greater distance.
  6. Inferred Mineral Resources were defined for blocks within the units that have been informed by a minimum of two drillholes within 50 m of a drillhole (100 m of drill spacing); Indicated Mineral Resources were defined for blocks within the units that have been informed by a minimum of three drillholes within 12.5 m of a drillhole (25 m of drill spacing); Measured Mineral Resources were defined for blocks within the units that have been informed by a minimum of three drillholes within 5 m of a drillholes (10 m of drill spacing) or 3 m around voids. Measured Mineral Resources were only defined for zones with a good reliability of the geological continuity or supported by underground workings.
  7. The estimate is reported for potential underground scenario at cut-off grades of 2.8 g/t Au (>=45 degree dip) and 3.2 g/t Au (<45 degree dip). The cut-off grades were calculated using a gold price of US$1,550 per ounce, a USD:CAD exchange rate of 1.32 (resulting in C$1,914 per ounce gold price); mining cost C$125/t (>=45 degree dip); C$150/t (<45 degree dip); processing cost C$35/t; G&A C$16/t; metallurgical recovery of 97%; royalties of US$37.52 per ounce; and refining and transport cost of US$1.50 per ounce.
  8. The number of metric tonnes and ounces were rounded to the nearest hundred and the metal contents are presented in troy ounces (tonne x grade/31.10348). Rounding may result in apparent summation differences between tonnes, grades and contained metals content.
  9. BBA Inc. is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political or marketing issues, or any other relevant issues not reported in this Report that could materially affect the mineral resource estimate.

Geology

The Beaufor deposit is included in the Bourlamaque granodiorite. Gold mineralization occurs in veins associated with shear zones that moderately dip south. The mineralization is associated with quartz-tourmaline veins resulting from the filling of shear and extension fractures. The gold-bearing veins show a close association with mafic dykes intruding on and undercutting the granodiorite. The dykes seem to have influenced the structural control of the gold-bearing veins.

Mineralization

Gold-bearing veins at the Beaufor Mine consist of quartz-tourmaline-pyrite veins, typical of Archean epigenetic lode gold deposits, that cross-cut the Bourlamaque Batholith. Mafic dykes that predate the mineralization are associated with shear- hosted gold-bearing veins. Shallowly dipping extensional gold-bearing veins are commonly observed at the Beaufor Mine. Shear zones striking N70o and dipping steeply to the southwest control the opening and gold enrichment of veins.

All the gold-bearing veins are contained in a strongly-altered granodiorite in the form of chlorite-silica forming anastomosing corridors of 5 m to 30 m in thickness. The veins at the Beaufor Mine form sometimes panels of more than 300 m in length by 350 m in height. The thickness of the veins varies from 5 cm to 5 m, but generally, the thickness of the quartz veining system 30 cm to 120 cm. The zones are limited by the Beaufor fault (N115o/65o-75o) and by a parallel system of shears (N70o/sub vertical).

McKenzie Break

High-grade gold deposit near Monarch’s Beacon mill

Monarch Gold acquired a 100% interest in the McKenzie Break property from Agnico Eagle in 2018. That interest was transferred to Monarch Mining following the completion of the transaction between Yamana Gold and Monarch Gold in 2021

The property hosts a high-grade gold deposit that lies just 20 kilometres north of the Beacon mill and 35 kilometres northeast of Val-d'Or, Quebec. It consists of 183 mineral claims covering a total area of 78.5 km² and has surface and underground infrastructure, including a ramp down to a depth of 80 metres below the surface. The property is also located about nine kilometres south of the rail link between Barraute and Senneterre, and is accessible year-round via Route 397 and a gravel road.

The Company will start a fully funded 15,000 to 20,000-metre drilling program in the second half of 2022.

Resources

Estimated mineral resource table

The resource estimate is based on a database of 332 drill holes, 57,789 metres of drilling and 34,026 assays. A total of 30 mineralized envelopes were modelled and validated. Capping was applied to raw assays before compositing, with grades capped at 60 g/t Au for the mineralized zones. The independent and qualified persons for the mineral resource estimate, as defined by NI 43101, are Alain-Jean Beauregard, P.Geo., Daniel Gaudreault, P.Eng., Geologica Groupe-Conseil Inc., and Merouane Rachidi, P.Geo., Claude Duplessi, P.Eng., GoldMinds GeoServices Inc.

Notes:

  1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to a Measured and Indicated Mineral Resource and must not be converted to a Mineral Reserve. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, market or other relevant issues. The quantity and grade of reported inferred resources are uncertain in nature and there has not been sufficient work to define these inferred resources as indicated or measured resources.
  2. The database used for this mineral estimate includes drill results obtained from historical records and up to the recent 2018-2020 drill program.
  3. Mineral Resources are reported at a cut-off grade of 0.50 g/t Au for the pit-constrained and Underground mineral resources are reported at a cut-off grade of 2.38 g/t Au within reasonably mineable volumes.
  4. These cut-offs were calculated at a gold price of C$1,980 ounce.
  5. The pit-constrained resources were based on the following parameters: mining cost $3.5/t, processing, transportation + G&A costs $27/t, Au recovery 95%, pit slopes 15 degrees for overburden and 50 degrees for rock.
  6. The underground reasonably mineable volumes were based on the following parameters: mining cost $98/t, processing, transportation + G&A costs $27/t, Au recovery 95%, dilution of 15% at 0 g/t Au with a minimum stope dimension of 10m x 10m x 5m.
  7. The geological interpretation of the deposits was based on lithologies and the typical mineralized interval mainly composed by diorite hosted shear zones.
  8. The mineral resource presented here was estimated with a block size of 5m X 5m X 5m for the pit-constrained and for underground.
  9. The blocks were interpolated from equal length composites calculated from the mineralized intervals. Prior to compositing, high-grade gold assays were capped to 60 g/t Au applied on 0.6-metre composites.
  10. The mineral estimation was completed using the inverse distance squared methodology utilizing two passes. For each pass, search ellipsoids followed the geological interpretation trends were used.
  11. Tonnage estimates are based on rock specific gravity of 2.77 tonnes per cubic metre for all the zones. Results are presented undiluted and in situ.
  12. Estimates use metric units (metres, tonnes and g/t). Metal contents are presented in troy ounces (metric tonne x grade / 31.10348).
  13. This mineral resource estimate is dated February 1st, 2021 and the effective date for the drillhole database used to produce this updated mineral resource estimate is January 4th, 2021. Tonnages and ounces in the tables are rounded to nearest hundred. Numbers may not total due to rounding.
  14. No economic evaluation of the resources has been produced.

Swanson

Large gold property with open pit potential

Monarch Gold acquired a 100% interest in the Swanson property from Agnico Eagle in 2018. That interest was transferred to Monarch Mining following the completion of the transaction between Yamana Gold and Monarch Gold in 2021.  

The Swanson property hosts a gold deposit located 65 kilometres from the Beacon mill and 12 kilometres northeast of Barraute, Quebec. It consists of one mineral lease and 127 claims covering a total area of ​​51.26 km², as well as a 500-metre ramp down to a depth of 80 metres. The property is accessible year-round via Route 367 and a gravel road. A railway track also crosses the property, as does a transmission line.

In the last year, Monarch completed a 3D compilation and identified priority drill targets. In 2022, the Company initiated a 5,000-metre drilling program, and recently increased the program size to 10,000 metres in the light of strong initial results. 

Resources

Estimated mineral resource table

The resource area within the deposit measures 500 m along strike, 400 m wide and 500 m deep. The estimate is based on a database of 209 drill holes (146 surface holes and 63 underground holes) and 10,000 assays. Grades were capped at 15 g/t Au for the mineralized zones and 4 g/t Au for the dilution envelope. Capping was applied to raw assays before compositing. The mineral resource was estimated using a minimum cut-off grade for two combined potential extraction scenarios: constrained pit and underground. Cut-off grades of 0.75 g/t Au for constrained pit and 2.40 g/t Au for underground were defined based on a gold price of CA$2,160 and an exchange rate of 1.34 USD/CAD.  The independent and qualified persons for the mineral resource estimate, as defined by NI 43101, are Christine Beausoleil, P.Geo., and Alain Carrier, P.Geo., of InnovExplo.

Croinor Gold

Strong underground potential

Monarch holds a 100% interest in the Croinor Gold property, which consists of one mining lease for a total of 337 claims over a 151.88 km² area. The property is located approximately 55 km east of Val-d'Or (75 km by road) and 27 km east of Louvicourt, the nearest town.

Resources

Estimated mineral resource table
Notes:
1. The independent and qualified persons for the mineral resource estimate, as defined by NI 43-101, are Olivier Vadnais-Leblanc, P.Geo., Carl Pelletier, P.Geo. and Eric Lecomte, P.Eng. all from InnovExplo Inc. The effective date is June 17, 2022.
2. These mineral resources are not mineral reserves, as they do not have demonstrated economic viability. The mineral resource estimate follows current CIM definitions and guidelines.
3. The results are presented undiluted and the estimate encompasses three gold deposits (Croinor, Bug Lake and Suzanne) including 95 gold-bearing lenses, some of which contain mineral resources below the cut-off grade.
4. High-grade capping supported by statistical analysis was done on composite data and was established at 80 g/t Au.
5. The estimate was completed with block models in LeapFrog Edge.
6. Grade interpolation was performed with the ID2 method on 1 m composites (block size of 1mx 1m x 1m).
7. A minimum true thickness of 1.8 m was applied, using the grade of the adjacent material when assayed, or a value of zero when not assayed.
8. A density of 2.8g/cm3 was used for the mineralized zones, a density of 2.9 g/cm3 was assigned to the diorite and the volcanic host rock have a density of 2.78g/cm3. Diorite and volcanic rock are generally considered as waste rock. The overburden was assigned a density of 2 g/cm3.
9. The mineral resource estimate is categorized as measured, indicated or inferred. The measured category was defined by the distance (25 m) between a block and a channel sample collected in an underground drift. The indicated category was defined using a 40 m search ellipsoid and the inferred category was defined using a 100m search ellipsoid.
10. Mining depletion was applied to the block model using historical underground openings and open pits.
11. The reasonable prospect for eventual economic extraction is met by having constraining volumes applied to any blocks using the Deswik Stope Optimizer (DSO) and by the application of cut-off grades. The mineral resource is reported at a cut-off of 4 g/t for the potential underground long hole extraction scenario and of 5.1 g/t for the potential underground room and pillar extraction scenario based on market conditions (metal price, exchange rate and production cost). The cut-off grades were calculated using the following parameters: mining cost = CA$173.00 (long hole) and CA$241.50 (room and pillar); processing cost = CA$50.00; general and administrative = CA$25.00; refining costs = CA$5.00; royalty costs = CA$64.00; gold price = US$1,600.00/oz; USD:CAD exchange rate = 1.30. The cut-off grades should be reviewed in the light of future prevailing market conditions (metal prices, exchange rates, mining costs, etc.).
12. The number of metric tonnes was rounded to the nearest hundred, following the recommendations in NI43‑101, and any discrepancies in the totals are due to rounding effects. Metal content is presented in troy ounces (tonnes x grade / 31.10348).
13. The authors are not aware of any known environmental, permitting, legal, title-related, taxation, socio-political or marketing issues or any other relevant issue not reported in the technical report that could materially affect the mineral resource estimate.

Geology

The Croinor Gold property is located in the eastern part of the Archean Abitibi Greenstone Belt in the southern Superior Province of the Canadian Shield.The Abitibi Greenstone Belt is one of the most extensive continuous expanses of low metamorphic grade Archean volcanic and sedimentary rocks in the world.

The Croinor Gold property is underlain by two major lithological packages—the dominantly volcanic Assup Domain in the north and the dominantly sedimentary Garden Island Domain in the south. The Assup Domain is further divided into the mafic volcanic Aurora Group in the south and the mafic to intermediate volcanic Assup Group in the north (dominantly mafic). The Pershing Batholith overlaps the southwest end of the property. The Croinor Gold property is transected by the Garden Island Deformation Corridor in a northwest-southeast direction, which overprints and partially follows the contact between the Assup and Garden Island domains.

Mineralization

The Croinor Gold deposit is hosted by the synvolcanic Croinor Sill. This dioritic sill is from 60 to 120 m thick and hosted within volcanic rocks of the Assup Domain. The deposit is characterized by gold-rich lenses consisting of quartz-carbonate-tourmaline-pyrite veins, altered pyritic host rock material, and/or tectonic breccia (pyritic host fragments within a quartz-carbonate-tourmaline-pyrite vein).

The mineralized lenses range from 60 to 120 m long. The lenses can generally be followed from one section to another (10 m sections) over lateral distances varying from several tens of m up to 600 m. To date, about 40 gold-rich lenses have been identified.

Other Showings

Many other showings have been explored to a degree ranging from trenching to drilling.  In most cases, gold mineralization is found in vein systems within or associated with dyke, sill or pluton intrusives within the volcanics.

The known showings are Gold Bug, Croinor-Trench 2, Bug Lake, Pershon, Rocheleau-3, Rocheleau-5, T13, Kenda Pershing, Ansley, Onyx-Tavernier, Jolin and Brett-Tretheway.

Beacon Mill

Fully operational and refurbished 750 tpd mill

The Beacon Mill is located on a 1.8 km2 property consisting of a mining lease, a mining concession and 11 mining claims. The property also has tailings management ponds, underground installations, a 500-metre shaft and a mechanical shop. The mill is located in Val-d’Or on Route 117, less than 10 km from the Beaufor Mine and near the railway system.

The Beacon Mill has a certificate of authorization from the Ministère du Développement durable, de l’Environnement et de la Lutte contre les changements climatiques for the processing of 1.8 million tonnes of tailings, equivalent to approximately nine years of mineral processing at full capacity.

The mill is currently being refurbished on a $10 million budget and is expected to be fully operational by June 2022, in line with the recommissioning of the Beaufor Mine.

Gold Resources

Mineral Resource Estimates

1 Source: NI 43-101 Technical Report and Mineral Resource Estimate for the Beaufor Mine Project, October 13, 2021, Val-d’Or, Québec, Canada, Charlotte Athurion, P. Geo., Pierre-Luc Richard, P. Geo., and Dario Evangelista, P. Eng., BBA Inc.
2 Source: NI 43-101 Technical Evaluation Report on the McKenzie Break Property, October 14, 2021, Val-d’Or, Québec, Canada, Alain-Jean Beauregard, P.Geo., Daniel Gaudreault, P.Eng., Geologica Groupe-Conseil Inc., and Merouane Rachidi, P.Geo., Claude Duplessis, P.Eng., GoldMinds GeoServices Inc.
3 Source: NI 43-101 Technical Report and Mineral Resource Estimate for the Swanson Project, January 22, 2021, Val-d’Or, Québec, Canada, Christine Beausoleil, P. Geo. and Alain Carrier, P. Geo., InnovExplo Inc.
4 Numbers may not add due to rounding.

Historical Mineral Resource Estimate

1 Source: Monarch Gold prefeasibility study (January 19, 2018). This resource was completed for Monarch Gold and has not been reviewed by a qualified person for Monarch Mining as required under National Instrument 43-101 and is thus considered as an historical estimate. Furthermore, a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves; and therefore, Monarch is not treating the historical estimate as current mineral resources or mineral reserves.
2 Numbers may not add due to rounding.