VANCOUVER, Jan. 29, 2014 /CNW/ - Monument Mining Limited (TSX-V: MMY)
and (FSE: D7Q1) ("Monument" or the "Company") today announced that it
has entered into a binding Oxide Magnetite Purchase and Profit-Sharing
Agreement (the "Agreement") for the acquisition of certain overburden
top soils on the Mengapur Project and the production of magnetite from
these soils.
"This is an excellent transaction for Monument and its shareholders. We
expect this transaction to allow us to begin producing magnetite from
stockpiled and surface top soils on the Mengapur Project in the
near-term with a relatively small investment in processing facilities,"
said Robert F. Baldock, Monument's President and CEO. "This acquisition
will enable Monument to turn overburden costs into a potentially
profitable operation and potentially add significant value to the
Mengapur Project for the benefit of all shareholders and potential
investors. The removal of stockpiled material and overburden would
represent a large portion of upfront mine development and operation
costs on the Mengapur Project, as the overburden would need to be
removed before hard rock open pit material could be accessed for
mining."
The Agreement is with the closely-held Malaysian mining company, Malaco
Mining Sdn. Bhd., its group of companies and shareholders
(collectively, "Malaco"). Malaco is a previous vendor of the Mengapur
Project and it currently holds the rights to oxide magnetite material
contained in top soil overburden on the Mengapur Project, including
Areas A, B and C of the project. Monument, through its wholly owned
subsidiary Monument Mengapur Sdn Bhd ("MMSB") - the exclusive operator
of the Mengapur Project - has been managing Malaco's top soil magnetite
operation on Areas A and B since September 2012. Monument is
responsible for grade control, a weighbridge operation and other
administrative activities on Areas A and B including collecting
proceeds and paying royalties to the State Government.
Profit Sharing Plan and Stockpile Acquisition
Under the Agreement, Malaco has confirmed MMSB's previously-granted
right to access, extract, process and sell the oxide magnetite
materials on the Area C overburden according to MMSB's mine plan and
has agreed on a profit-sharing arrangement for that overburden
material.
Under the profit-sharing arrangement Malaco will receive, based on a
sliding scale profit sharing arrangement, a share of profit up to
US$5.00 per tonne of Area C marketable grade magnetite delivered and
sold by MMSB at the near-by Kuantan port. However, no profit-sharing
payment will be payable to Malaco on the first US$10.0 million net
profits generated from the sales of marketable grade magnetite
production from the Area C overburden.
In addition, Malaco has agreed to sell to MMSB approximately 1.2 million
tonnes of stockpiled oxide magnetite top soils. This stockpiled
material is intended to be used as initial inventory for approximately
the first year of magnetite production at the processing plant to be
constructed by Monument by Monument, as described below. The stockpiled
materials are not subject to any profit-sharing arrangement with
Malaco.
The total consideration payable by Monument under the Agreement is the
issuance of 25,000,000 Monument common shares at closing. The
transaction is scheduled to close when formalities are completed in
February 2014 and is subject to all required regulatory approvals and
filings.
Mengapur Oxide Magnetite Development Plan
Monument has a three-phase development plan for oxide magnetite
production on top soil of Area C following closing of the transaction,
including:
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Phase I - Production of magnetite by magnetic separation from
soils;
Phase II - Production of magnetite from lump rock by crushing
and grinding; and
Phase III - Recovery of ultra-fine magnetite from the hematite
material for additional magnetite normally discarded.
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In Phase I, Monument expects to design, engineer, construct, commission
and operate a 7,000 tonnes per day (tpd) magnetite concentration
processing plant on the Mengapur Project. The plant will target
production of marketable grade magnetite from overburden top soils.
Certain capital equipment required to construct this plant was acquired
and paid for in the 2012 acquisition of Monument's indirect
wholly-owned subsidiary, Cermat Amman Sdn. Bhd. This equipment is
already on site and is enhanced by the additional improvements to site
infrastructure such as camp, workshops, administration offices, as well
as process water and power supply from its existing power station.
Monument believes the additional capital investment to establish this
operation will be no more than US$10.0 million, which MMSB will pay
from cash on hand.
Material removed under this type of operation is simply washed and then
beneficiated by magnetic separation resulting in the finished product
for sale, a well understood and known operation used presently by other
iron operations in the area. In anticipation of the proposed operation
MMSB has been observing the present operations of Malaco, which
retained the overburden top soils on the Mengapur Project when MMSB
acquired the property in 2012. These soils have been extracted,
processed and sold from other portions of the Mengapur Project, known
as Area A and Area B, for a number of years.
Based on MMSB's own drilling, assaying, test work and pilot plant work,
its financial assessment and its direct observation and management of
Malaco's existing operation, Monument has determined that this
investment is a sound business proposition. However, there can be no
certainty that the proposed operation on Area C and the stockpile will
make a profit or produce positive cash flow. The decision to produce
magnetite from top soils is based on economic models prepared by the
Company in conjunction with management's knowledge of the property and
its experience and expertise in building production facilities in
Malaysia, including its experience as the exclusive operator for
Malaco's oxide magnetite material operations at Mengapur Project. The
production decision is not based on a mineral resource estimate, a
preliminary economic assessment, a pre-feasibility study, or a
feasibility study of mineral reserves demonstrating economic and
technical viability. Accordingly, there is increased uncertainty and
economic and technical risk of failure associated with this production
decision. Production and economic variables may vary considerable due
to the absence of a completed and detailed analysis as would be
included in a pre-feasibility study or feasibility study. Risk
associated with this production decision include, without
limitation: the risk that grades of magnetite in the stockpile and
surface materials will be lower than expected; the risk that processing
of materials into marketable magnetite will be more difficult and
expensive than expected; technical risks associated with the efficient
extraction and transportation of stockpiled and surface materials;
economic and market risks associated with the sale of marketable
magnetite materials; and all of the other risks inherent in the mining
industry.
Monument continues its exploration activities on the Mengapur Project. A
mineral resource estimate and preliminary economic assessment for the
non-magnetite operations on the Mengapur Project is scheduled for
completion by March 31, 2014.
About Monument
Monument Mining Limited (TSX-V:MMY) (FSE:D7Q1) is an established
Canadian gold producer that owns and operates the Selinsing Gold Mine
in Malaysia, with production cash costs among the lowest in the
world. Its experienced management team is committed to growth and is
advancing several exploration and development projects in Malaysia,
including the 100% owned, development stage, Mengapur Polymetallic
Project. The Company employs 330 people in Malaysia and is committed to
the highest standards of environmental management, social
responsibility, and health and safety for its employees and neighboring
communities.
Robert F. Baldock, President and CEO
Monument Mining Limited
Suite 910- 688 West Hastings Street
Vancouver B.C. Canada V6B 1P1
"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 release."
Forward-Looking Statement
This news release includes statements containing forward-looking
information about Monument, its business and future plans
("forward-looking statements"). Forward-looking statements are
statements that involve expectations, plans, objectives or future
events that are not historical facts and include: the Company's plans
for building and operating magnetite production facilities, the
Company's plans to extracting and process magnetite from surface
materials, the grade of the stockpiled materials being purchased by
Monument, the anticipated cost of a proposed processing plant and all
of the other plans with respect to its mineral projects and the timing
and results of proposed programs and events referred to in this news
release. Generally, forward-looking information can be identified by
the use of forward-looking terminology such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved". The forward-looking
statements in this news release are subject to various risks,
uncertainties and other factors that could cause actual results or
achievements to differ materially from those expressed or implied by
the forward-looking statements. These risks and certain other factors
include, without limitation: the risks regarding production referred to
in this news release; the risk that the market price of gold, copper,
magnetite and other metals decreases significantly; risks related to
general business, economic, competitive, geopolitical and social
uncertainties; uncertainties regarding the results of current
exploration activities; uncertainties in the progress and timing of
development activities; foreign operations risks; other risks inherent
in the mining industry and other risks described in the management
discussion and analysis of the Company and the technical reports on the
Company's projects, all of which are available under the profile of the
Company on SEDAR at www.sedar.com. Material factors and assumptions
used to develop forward-looking statements in this news release
include: the Company's assumption that the stockpiled materials and
the surface materials on Area C will contain the grade of magnetite
that the Company expects; the Company's expectation that process
facilities can be built on budget; expectations regarding the estimated
cash cost per ounce of gold production and the estimated cash flows
which may be generated from the operations, general economic factors
and other factors that may be beyond the control of Monument;
assumptions and expectations regarding the results of exploration on
the Company's projects; assumptions regarding the future price of gold
of other minerals; the timing and amount of estimated future
production; the expected timing and results of development and
exploration activities; costs of future activities; capital and
operating expenditures; success of exploration activities; mining or
processing issues; exchange rates; and all of the factors and
assumptions described in the management discussion and analysis of the
Company and the technical reports on the Company's projects, all of
which are available under the profile of the Company on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that
could cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be
no assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. The Company does not
undertake to update any forward-looking information, except in
accordance with applicable securities laws.
SOURCE Monument Mining Limited