Monarques becomes a gold producer with the Beaufor Mine and significantly increases its mining assets and gold resources
Monarques’ new profile
Montreal, Quebec, Canada, October 2, 2017 – MONARQUES GOLD CORPORATION (“Monarques” or the “Corporation”) (TSX-V: MQR) (FRANKFURT: MR7) is pleased to announce the closing of the transaction with Richmont Mines Inc. (“Richmont”) (TSX - NYSE: RIC) pursuant to which Monarques acquires all of Richmont's mining assets in Québec (the “Transaction”) in exchange for the issuance of 34,633,203 common shares of the Corporation to Richmont. The assets acquired consist of all of Richmont’s mineral claims, mining leases and mining concessions, including the Beaufor mine, the Chimo , Monique and Wasamac properties and all the issued and outstanding shares of Usine Camflo Inc., as well as all mills, buildings, structures, equipment, inventory and property.
“We are extremely proud to have completed this transaction, which is a transformative one for Monarques,” said Jean-Marc Lacoste, President and Chief Executive Officer of Monarques. “This consolidation of Monarques and Richmont assets in the Abitibi region has been part of our growth plan for nearly a year, and we are very pleased that the transaction has taken place. First and foremost, it will enable us to become a gold producer in what we consider to be one of the best mining districts in the world, and to advance our mining projects so that our Camflo and Beacon mills can one day operate at full capacity. This transaction also has the advantage of providing Monarques with a skilled workforce that has the expertise, knowledge and motivation to take us to the next stage of our development. In the coming quarters, our objective will be to optimize the productivity of the Beaufor Mine and further develop our other gold projects.”
Monarques reserve and resource estimates post-transaction*
* The Mineral Reserve and Resource parameters and estimation methods for the Beaufor Mine and the Wasamac property are presented in the annex.
1 Source: Technical Report on the Mineral Resource and Mineral Reserve Estimate of the Beaufor Mine as of December 31, 2016, Val-d’Or, Québec, Canada, Bernard Salmon, Eng., Louis Nkoy Manda Mbomba, B.A.Sc., Eng.
2 Source: Monarques prefeasibility study (October 7, 2014) and resource estimate (November 6, 2015)
3 Source: MRB et Associés (January 2015)
4 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.
The current Mineral Resource estimate on the Wasamac property is based on a technical report dated May 11, 2012, whereas the Mineral Resource estimate disclosed in the Corporation’s press release dated September 11, 2017 was based on an internal estimation made by Richmont.
1) Closing of the $6,525,251 private placement and conversion of the 18,643,573 subscription receipts for 18,643,573 common shares of the Corporation
On September 11, 2017, the Corporation announced the conclusion of a non-brokered private placement of 18,643,573 subscription receipts (the “receipts”) priced at $0.35 each for gross proceeds of $6,525,251. Following the closing of the Transaction, the receipts were exchanged for 18,643,573 common shares of the Corporation. Richmont subscribed for $2.0 million of receipts, the Fonds de solidarité FTQ subscribed for $1.0 million and Probe Metals Inc. (“Probe Metals”) subscribed for $0.6 million.
All securities issued pursuant to the private placement are subject to a hold period of four months and one day. Shares issued to Richmont through the conversion of the receipts are subject to a one-year lock-up provision. Following the closing of the Transaction and the private placement, Richmont will hold 40,348,203 common shares of Monarques or 19.9% of the issued and outstanding common shares of the Corporation.
The Fonds de solidarité FTQ is a development capital investment fund that channels the savings of Quebecers into investments. As at May 31, 2017, the organization had $13.1 billion in net assets, and through its current portfolio of investments has helped create and protect 186,440 jobs. The Fonds is a partner in more than 2,700 companies and has 645,664 shareholder-savers. Please visit fondsftq.com for more information.
2) Closing of the US $4 million credit facility with Auramet International LLC
Monarques closed the senior secured gold loan agreement with Auramet International LLC providing the Corporation with access to a US $4 million credit facility. The loan will be repaid in 12 installments of 287 ounces of gold commencing on October 31, 2017, and expiring on September 30, 2018, inclusive. The loan is guaranteed by the Corporation’s subsidiaries, namely X-Ore Resources, Beacon Gold Mill Inc. and Camflo Mill Inc.
3) Closing of the Courvan property sale to Probe Metals
Finally, the Corporation closed the transaction with Probe Metals relating to the sale of Monarques’ full interest in the Courvan property in consideration for a cash payment of $400,000.
Appointment of Marc-André Lavergne as Vice-President, Operations
The Corporation is pleased to announce the appointment of Marc-André Laverge, Eng., as Vice-President, Operations.
Mr. Lavergne has over 14 years of experience in mine engineering with various companies, including Cambior, Agnico Eagle and North American Palladium. In November 2011, Mr. Lavergne joined Richmont Mines as General Superintendent at the Francoeur Mine, and has held various management positions within the Corporation, including at the Francoeur and the Beaufor divisions. In December 2013, he was named Manager, Beaufor and Monique Divisions. Mr. Lavergne holds a Bachelor degree in Mining Engineering from the Polytechnique School of Montreal.
“We welcome Mr. Lavergne to his new position. Marc-André has solid mining expertise, having moved up the ranks at Richmont over the past six years, including managing the Beaufor and Monique mines. The experience he has gained over the course of his career will be a great help to us in achieving our objectives at the operational level,” said Mr. Lacoste.
The technical and scientific content of this press release has been reviewed and approved by Kenneth Williamson, M.Sc., P.Geo, the Corporation’s qualified person under National Instrument 43101.
ABOUT MONARQUES GOLD CORPORATION
Monarques Gold Corporation (TSX-V: MQR) is an emerging gold producer aiming to achieve ongoing growth through its large portfolio of high-quality gold projects in the Abitibi mining camp in the province of Quebec, Canada. The Corporation currently has over 240 km² of gold properties (see map), including the Beaufor Mine; the Croinor Gold (see video) and Wasamac advanced projects; the Camflo and Beacon mills; as well as six promising exploration projects. It also offers toll milling services through its 1,200 tpd Camflo mill. Monarques Gold has over 150 qualified employees that oversee its production, development and exploration activities and benefits from a strong financial position.
The forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors that may cause Monarques’ actual results, performance and achievements to be materially different from the results, performance or achievements expressed or implied therein. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
In 2016, the Mineral Reserve and Mineral Resource estimates for the Beaufor Mine were performed by the Beaufor Mine staff under the supervision of Bernard Salmon, P.Eng. and Louis Nkoy, P.Eng., employees of Richmont Mines and qualified persons pursuant to NI 43-101. The database, factors and parameters used in the determination of the Mineral Reserves and Resources disclosed in this press release are based on the following technical report: Technical Report on the Mineral Resource and Mineral Reserve Estimate of the Beaufor Mine as of December 31, 2016, Val-d’Or, Québec, Canada, Bernard Salmon, Eng., Louis Nkoy Manda Mbomba, B.A.Sc., Eng.
The title, authors and issuer of the 43-101 report that was filed on SEDAR on March 24, 2016, are: Technical Report on the Mineral Resource and Mineral Reserve Estimate of the Beaufor Mine as of December 31, 2015, Val-d’Or, Québec, Canada, Jessy Thelland, B.Sc.,Geo, Louis Nkoy Manda Mbomba, B.A.Sc., Eng., Richmont Mines Inc.
The technical and scientific content of these technical reports has been reviewed and approved by Kenneth Williamson, M.Sc., P.Geo, the Corporation’s qualified person under National Instrument 43101.
To Monarques’ knowledge, there are no new important scientific or technical information that would result in incorrect or misleading information relating to the Mineral Resource or the Mineral Reserve.
Mineral Reserve Table
Proven Mineral Reserves
At the Beaufor Mine, Proven reserves are based on ore blocks developed from drifts or raises up to a maximum of 8 metres from these openings. The level of accuracy of the economic evaluation in the estimation of reserves is that of a feasibility study.
Probable Mineral Reserves
The Mineral Reserve estimate in the Probable category is based on an economic study in order to determine the economically mineable part of an Indicated Mineral Resource. At the Beaufor Mine, Probable Reserves extend to a maximum of 20 metres from drilling data. Dilution and mining recovery rates are included in the reserve estimation.
Mineral Reserve Parameters and Estimation Methods
Mineral Resource Table
Mineral Resource Classification
Measured Mineral Resources at the Beaufor Mine were confirmed by underground excavation and are extended over 8 metres from these openings following the dip of the zone. Indicated and Inferred Mineral Resources are defined by drilling and the polygons extend to a maximum of 20 metres of the drill hole.
Mineral Resource Parameters and Estimation Methods
A technical report supporting the above mineral resource estimate for the Beaufor Mine will be filed on SEDAR within 180 days of this announcement.
This mineral resource estimation for the Wasamac property was carried out by Daniel Adam, geo., Ph.D., General Manager, Exploration and Sustainable Development, an employee of Richmont Mines. He is a qualified person and member of a professional association as defined by the R 43-101 requirements.
This mineral inventory was realized in accordance with the recommendations and regulations as set by the R 43-101 committee. The classification of the Mineral Resources follows the general guidelines as adopted in December 2005 by the “CIM” (Canadian Institute of Mining) council.
The title, authors and issuer of the 43-101 report that was filed on SEDAR on May 11, 2012, are: Technical Report on the Wasamac Project, 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.
The technical and scientific content of the technical report has been reviewed and approved by Kenneth Williamson, M.Sc., P.Geo, the Corporation’s qualified person under National Instrument 43101.
To Monarques’ knowledge, there are no new important scientific or technical information that would result in incorrect or misleading information relating to the Mineral Resource.
Mineral Resource Table
Mineral Resource Classification
Resources classification was based on the criteria proposed in BSI’s 2010 statistical review of the Wasamac project. For the Main Zone: Measured resources correspond to the blocks interpolated in the first pass of Kriging (15 metres x 7 metres x 10 metres search ellipse with a minimum of 6 and a maximum of 12 composites and a maximum of 3 composites from the same hole); Indicated resources correspond to the blocks interpolated in the second pass of Kriging (30 metres x 12 metres x 50 metres search ellipse with a minimum of 6 and a maximum of 12 composites and a maximum of 3 from the same hole); Inferred resources correspond to the blocks interpolated in the third pass of Kriging (50 metres x 15 metres x 75 metres search ellipse with a minimum of 2 and a maximum of 12 composites and a maximum of 3 composites from the same hole). Similar parameters were used for zones 1, 2 and 3.
Mineral Resource 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:
A technical report supporting the above mineral resource estimate for the Wasamac property will be filed on SEDAR within 180 days of this announcement.