Monarch spreads its wings in El Dorado camp

In 1987, a company was listed on the London Stock Exchange in order to carry out gold exploration in Venezuela. Since then, Monarch Resources has invested more than US$80 million in the country and gone on to have its shares listed on the Toronto Stock Exchange.

Today, the company operates and has a 51% interest in profits generated by the Revemin plant, a toll processing mill in the district of El Callao. The project is a joint venture with the Venezuelan government. And in June of this year, the company opened — on time and on budget — its new, high-grade underground gold mine known as La Camorra. Built for about US$24 million and situated in the district of El Dorado, Camorra is the first private underground gold mine to be developed in Venezuela in half a century. It is targeted to produce more than 2.5 million grams (80,000 oz.) annually, at an average cash cost of US$4 per gram (US$125 per oz.).

The deposit is reported to host an underground (unweathered) probable mining reserve of 538,840 tonnes grading 22.4 grams gold per tonne, plus an additional open-pit (weathered) reserve of 75,000 tonnes grading 5.4 grams. Some problems were encountered in the startup phase of operations, involving process flow modifications to the mill. These are still being resolved. Some delays were also encountered in developing the underground mine; to compensate for this, development of the open pit was accelerated to provide a supplemental source of ore.

Monarch plans to carry out deep drilling to test the downplunge potential of La Camorra. The program is expected to begin later this year. Also on the exploration front, the company has agreed to acquire a company holding mineral rights to the Tuna 1 concession in El Dorado. The concession comprises 2,800 hectares and is 15 km northeast of La Camorra. It is underlain by a central core of early Proterozoic deformed andesitic lavas of the Carichapo group, flanked by pyroclastic and metasedimentary rocks of a formation hosting the Camorra deposit.

The company views acquisition of this concession as a “strategic addition” to its block of concessions surrounding La Camorra. Monarch intends to add to this land package, which now covers nearly 12,000 hectares. The company also has other concessions in Venezuela.

This year, the company realized net proceeds of US$22.3 million in connection with a listing and financings on the Toronto Stock Exchange. The bulk of the proceeds are to be used

for exploration programs on its main concessions in Venezuela. Monarch reported net income of US$518,000 for the first half of 1994, compared with a net loss of US$1.6 million for the same period last year. The company noted, however, that its earnings for the second half of 1994 will likely reflect lower operating results from Revemin.