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In the news with RFC Monument Mining

Published: 07:53 01 Mar 2016 EST

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MONUMENT MINING

CVE:MMY | C$0.15 | US$35m
Progression of Mine Development and Exploration at the Burnakura Gold Project & Q2 FY2016 ResultsA$10m
Update on Burnakura Gold Project, Murchison
Monument Mining has provided an update on the progression of the Burnakura Gold Project, Western Australia, including confirmation drilling over the North of Alliance and Tuckanarra deposits, open-pit mine optimisation, metallurgical test-work and environmental studies. In terms of mine development, the FEED report has now been finalised, and procurement of long-lead items, including secondary and tertiary crushers, is now complete. The company guides that the pre-existing plant and fixed assets have been maintained in good condition with a view to future commissioning, with refurbishing and construction expected to take around six months. The company is preparing to approach contractors for cost estimation, whilst the environmental permitting process remains ongoing.
At North of Alliance, 42 RC holes have been drilled to date, for a total of 5,944m, in addition to three metallurgical holes for 312m. Results are being used to extend resources for the deposit, with updated modelling in progress. At Tuckanarra, a FY16 programme was intended to confirm historical resources and acquire samples for metallurgical test-work. Successful twinning has occurred on multiple historic holes and nine targets have been identified for potential resource extension, with a follow up drilling programme being planned.
2QFY16 Results (Period ended 31 December 2015)
The company has announced production from the Selinsing operation of 5,050oz, down 49% YoY, at a still-competitive cash cost of US$639/oz. This was due to a scheduled reduction in the ore head grade from 1.46 g/t to 0.83 g/t as low-grade ore is processed through the plant in a transition from oxide to sulphide ore production, with recoveries falling to 63.5% from 84.6%. Whilst the profit from gold production stood at US$1.5m (5,100oz was sold at an average realised price of US$1,114/oz for top-line revenue of US$5.7m), the company made a net loss for the three months of US$2.5m, driven by the reduced production levels combining with continued weakness in the gold price during the period. The company had cash of US$24.1m as of end-December 2015, and benefits from a debt-free balance sheet.

The company’s portfolio includes the producing Selinsing Gold Mine and Mengapur Polymetallic Project in Malaysia, and the Murchison Gold Project in Western Australia — The open-pit Selinsing mine entered production in 3Q09, and FY15 production (to end-June) totalled 36,500oz at a cash cost of US$587/oz. Gold sales came to 36,500oz at an average realised price of US$1,228/oz, generating revenue of US$44.84m. With production costs of US$28.95m for the year, this implies an operating margin of 35%.
The Murchison Project comprises historic resources of 6.41Mt at 2.7 g/t for 546,000oz of gold — The project was acquired in February 2014, and comprises the Burnakura and Gabanintha tenements, with the neighbouring Tuckanarra being added as a strategic asset in November 2014. The Murchison assets also included a functioning 260,000tpa CIL gold processing plant and mine camp. The company commenced a drill programme on the Alliance/New Alliance historical open-pit deposits within the Burnakura tenement in May 2014, working towards issuing an NI-43-101-compliant resource statement. As of August 2015, compliant M&I resources stood at 98,000oz at 1.6 g/t, with the drilling programme ongoing to increase the mineral inventory. In light of the existing plant and infrastructure, the company is targeting start-up of the heap leaching facilities at Burnakura for mid-2016.
Mengapur historic resource totals 561,000t contained Cu, 1.15Moz Au, 64Moz Ag and 15Mt sulphur — Work has been done towards the rehabilitation of the former production plant as a 1,000tpd pilot plant, targeting copper with a contained iron by-product; however, plans have been put on hold due to weak commodity prices. R&D is looking to customise the Intec process (currently being piloted for gold recovery at Selinsing), which uses a mixed halide lixiviant for the extraction of pure metal from concentrate, to produce high-grade Cu for in-country sales.

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