Wasamac

Property Description

Monarques Gold holds a 100% interest in the Wasamac property, which includes three mining concessions and 12 mining claims covering a total area of 7.6 km2. The property is located in Beauchastel township at about 15 km west of Rouyn-Noranda, in the heart of the Abitibi gold mining camp in the province of Quebec.

Feasibility Study Highlights (December 2018)

  • Solid output: Annual average gold production of 142,000 ounces over 11 years.
  • High return: Pre-tax internal rate of return of 23.6%, net present value of $522 million and payback period of 3.6 years.
  • Low production cost: Production cash costs of $720/oz (US$550/oz) and all-in-sustaining costs of $826/oz (US$630/oz).
  • CAPEX: Initial capital expenditures of $464 million, including about $230 million for the mill and tailings facility.
  • Strategic location: Mine infrastructure to be located on newly acquired land next to the Trans-Canada highway and 200 metres from the railway leading to all the main custom milling facilities.
  • Strong exploration potential: Deposit largely underexplored at depth and along strike.

Feasibility Study Summary

Source: NI 43-101 Technical Report, Feasibility Study of the Wasamac Project, Rouyn-Noranda, Quebec, Canada, December 3, 2018, prepared by Carl Caumartin, P.Eng., BBA Inc., Alain Dorval, P.Eng., BBA Inc., John Henning, P.Eng., BBA Inc., Richard Jundis, P.Eng., BBA Inc., Luciano Piciacchia, P.Eng., BBA Inc. and Tudorel Ciuculescu, M.Sc., P.Geo., Roscoe Postle Associates Inc.

Sensitivity Analysis

The project’s sensitivity to the price of gold shows that an increase of just 20% in the price of gold brings the pre-tax NPV close to $900 million and the IRR above 30%. Concurrently, a drop in the price of gold of 20% would keep the project comfortably above the break-even level of $925 and the IRR would still post a low double-digit return.

Pre-tax NPV 5%

Pre-tax IRR

Mineral Resources

The mineral resources used as the basis for the feasibility study are summarized below.

Mineral Resource Statement – October 20, 2017

Notes:
  1. CIM (2014) definitions were followed for Mineral Resources.
  2. Mineral Resources are inclusive of Mineral Reserves.
  3. Mineral Resources are estimated at a cut-off grade of 1.0 g/t Au.
  4. Mineral Resources are estimated using a gold price of US$1,500 per ounce, and exchange rate of US$0.80 = C$1.00.
  5. A minimum mining width of four metres was used.
  6. A bulk density of 2.8 g/cm3 was used.
  7. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  8. Numbers may not add due to rounding.

Mineral Reserves

Mineral reserves were classified complying with the CIM definition standards for mineral resources and mineral reserves. Mineral reserves for the Wasamac deposit incorporate dilution and mining recovery factors based on the selected mining method and design. Mineral reserve is the estimated tonnage and grade of ore that is considered economically viable for extraction.

The mineral reserve estimate for the Wasamac deposit is based on the resource block model provided by RPA to Monarques in 2017, along with the information in the Preliminary Economic Assessment study conducted by RPA in 2012 for the previous mine owner, Richmont Mines Inc.

The price of gold is determined to be US$1,300/oz. The trailing average exchange rate of 1.31 C$/US$ is used in cut-off grade determination.

Mineral reserves were estimated from the resource block model provided from RPA, using software-generated optimized stopes based on an estimated 1.0 g/t cut-off grade.

Mineral Reserve Statement - December 1, 2018

Project capital cost summary

Project operating cost summary

Opportunities for improvement

There are significant opportunities that could improve the economics and the timetable of the Wasamac project. The major opportunities identified at this time are summarized in the feasibility study. Further information and assessments are needed prior to including these opportunities in the economic evaluation of the project.

* Source: Technical Report on the Wasamac Project, May 11, 2012, Rouyn-Noranda, Québec, Canada, Jacques Gauthier, ing., Yves Galarneau, ing., Marc Lavigne, M.Sc., ing., Daniel Adam, Ph.D., geo., Stéphane Lance, ing. and Colin Hardie, P. Eng., Roscoe Postle Associates Inc.

Notes:

Mineral resources parameters and estimation methods

The Mineral Resource estimate was done with all the assays results of the 2011 drilling program as of December 1, 2011 and after the reception of a re-interpretation of the continuity of the mineralized bodies in the Wasamac shear zone.

The method and parameters used for the resource estimation were as follows:

  • Interpretation and construction of the 3D envelope of the mineralized zones was done using section and plan views. Mineralized intercepts were coded by zone and all the intercepts, surface DDH, underground DDH and face, were verified.
  • A high grade assay capping value of 35 g/t Au was used as defined in the statistic review done by Belzile Solutions Inc. (“BSI”) in 2010.
  • 2 metre composites were created in all the mineralized intercepts and coded by zone. For the creation of the composites, the software was asked to create them in order to use the whole intercept, so the composite length was adjusted to make all intervals equal.
  • The Mineral Resource was estimated by 3D block modeling (Block dimension of 4 m x 4 m x 5 m wide) with Gems software and using 2 m composites. All of the underground developments and stopes were modeled in three dimensions. All the blocks located inside the stopes and developments were eliminated from the model (tonnage and grade equalled to zero).
  • Grade estimation was done by Ordinary Kriging using parameters based on a statistical study realized by BSI.
  • A density of 2.8 t/m3 was considered for tonnage calculation in mineralized zones. This tonnage factor is consistent with historical records and with the URSTM laboratory’s measurements completed in 2010 and 2011.
  • Grade estimation was verified and compared with an inverse square distance interpolation in Zone 2.
  • Inside the modeled mineralized zones, criteria to define the Mineral Resource was a minimum of 4 m true width with a minimum average grade of 1.5 g/t of gold. This cut-off was established using a gold price of US$1,200/oz. For the Measured and Indicated Resources of the Main Zone and Zone 1, a 10 metre pillar was left around all of the old stopes with the exception of 3 small stopes in the lower part of the Main Zone which were discarded from the Mineral Resources. To calculate the Mineral Resources inside each zone, lines were traced on a longitudinal section (to define blocks with at least a minimum true width of 4 metres and a minimum average grade of 1.5 g/t) and used to clip the blocks. Only the blocks inside the line were put into the Mineral Resources.

Mineralization

The Wasa shear zone runs east-west through the centre of the property. This shear zone, which trends at an azimuth of 265°, has a 50-60° dip to the north and a maximum thickness of 80 metres. To the west, the shear zone splits into two separate branches and becomes thinner, while to the east, the shear zone weakens as well and displays an average thickness of 25 metres. This shear zone is characterized by the development of a strong mylonitic fabric and an intense hydrothermal alteration which completely destroyed the primary structures and textures of the protolith. Mineral assemblages of rocks within the shear zone consist of chlorite, carbonate, hematite, albite and sericite in the middle of the zone. Gold is associated with a dissemination of fine pyrite in the altered portions of the shear zone.

Wasamac Fact Sheet

Wasamac Fact SheetWasamac Fact Sheet