Monument tightens belts, focuses on gold in Malaysia

VANCOUVER — After delaying its Mengapur iron project in the Pahang state of Malaysia in February, Monument Mining (TSXV: MMY) is bracing for the long downturn by improving its gold production and slashing corporate costs.

In the first quarter, the Vancouver-based junior saw a 25% increase in gold production to 9,346 oz. gold — compared to last year’s previous 7,487 oz. gold quarter — at its operating Selinsing mine, 65 km north of the city of Raub, Malaysia.

The extra ounces came from a 13% increase in head grades to 1.44 grams gold per tonne, coupled with a 48% rise in gold  recoveries to 82.2%. 

Cash costs also improved, dropping US$94 to US$560 per oz. for the quarter, reflecting a strong U.S. dollar and lower mine cash costs associated with shorter hauling routes from the open-pit operation. 

The stronger performance at Selinsing helped offset the impact of a lower average realized gold price of US$1,221 per oz. gold versus US$1,266 per oz. gold on the company’s gross revenues. 

For the nine-month period ending March 31 in 2015, revenue from gold sales was US$34.5 million, compared to US$36.4 million for the same period last year. 

But net earnings between 2015 and 2014 have increased dramatically. For the same period, Monument reported a net income of US$8.2 million versus US$2.2 million in 2014.

The company says the increase is due to reductions in corporate costs — which were slashed by 59% to US$3.4 million in during the same period— and losses from other, unspecified items.

Mineralization at Selinsing occurs along the north-trending Raub Bentong suture — a major tectonic feature that runs through peninsular Malaysia. 

The suture marks the edge of an ancient subduction zone between two cratons, one that was once an island arc in the west, and the other being a fragment of a continent in the east.

After subduction and deformation along the margin from 300 to 200 million years ago, gold-rich fluids migrated upwards through the crust, forming four gold belts across Malaysia and into neighbouring Thailand. 

In terms of historical production, the central gold belt of Malaysia — specifically the Raub Benton suture, which hosts the Selinsing deposit — is the most significant mineralized structure in the country. 

Within the belt, and 50 km south of Selinsing, is the Raub deposit, which is Malaysia’s most historic gold mining centre, boasting a historic production of 1 million oz. gold from 1889 to 2004.

It also includes the Penjom gold mine, 40 km southeast of Selinsing, which is Malaysia’s largest gold producer. The mine is operated by the Indonesian miner J Resources, and has a total resource (including reserves) of 1.36 million oz. gold from 26.3 million tonnes of 1.61 grams gold. 

The Selinsing deposit consists of gold-bearing quartz veins and stockworks within a package of sheared sedimentary rocks. It has total proven and probable reserves of 222,900 oz. gold from 4.9 million tonnes grading 1.4 grams gold, using an average gold price of US$1,550 per oz. gold.

Monument’s other assets include the Mengapur polymetallic project in Malaysia, located 130 km southeast of Selinsing, and its Murchison Gold project, 40 km southeast of Meekatharra in Western Australia. 

Monument has been gearing the Mengapur iron deposit towards production, but due to falling commodity prices, the company changed its course last year and re-engineered its 1,000-tonne-per-day pilot plant to include copper production. 

According to a press release, the company believes copper will enhance the project’s economics, along with using Intec Technology to produce London Metal Exchange-grade copper, and other base metals.

The technology has the potential to produce a copper product on site, without having to export concentrate. Monument has acquired the permits for a trial at its Selinsing gold plant. After this it will pursue the license rights to use the technology at its other projects.

Monument also focused on resource definition of the Alliance and New Alliance gold deposits at its Murchison project during the quarter. It acquired the former mine for $15 million in February last year, which included a fully operational gold processing plant, campsite and other infrastructure.

The work increased total contained gold ounces by 15% compared to the historical resource, and a 90% increase of indicated resources, but the company says it needs more drilling to establish a resource that will prove its economic viability. 

Murchison has an updated indicated resource of 1.13 million tonnes at 2.2 grams gold for 80,400 oz. gold, and an inferred resource of 5,000 tonnes at 2.2 grams gold for 3,200 oz. gold, using a 1-gram-gold cut-off.