UPDATED: Monarch Mining expands gold mineralization at its McKenzie Break property

Monarch Mining (TSX: GBAR; US-OTC: GBARF) has discovered shallow gold mineralization 1 km south of its McKenzie Break deposit in Quebec, about 35 km north of Val-d’Or.

The new discovery has the potential to be a ‘game changer’ according to president and CEO Jean-Marc Lacoste.

“Hitting a kilometre out changes things, no doubt,” he told The Northern Miner. “And it’s a game changer because it basically says the system is a lot bigger than anticipated. So, we want to keep drilling. We think this deposit could grow a lot bigger. We’re probably going to be drilling throughout the winter at McKenzie.”

Among the strongest results from the current drill program is hole MK-21-281, which intersected 3.93 grams gold per tonne over 2.83 metres from 52.58 metres downhole, including an intercept grading 6.46 grams gold per tonne over 1.42 metres. A second intercept in the hole  returned 3.93 grams gold per tonne over 5.45 metres from 138 metres down, and included 1.3 metres grading 11.58 grams gold per tonne.

Another hole, MK-21-287, intersected 1.52 grams gold per tonne over 8.8 metres starting from a depth of 112.2 metres, including. 3.61 grams gold per tonne over 1.8 metres. The two holes–MK-21-287 and MK-21-281– were drilled 125 metres apart.

The McKenzie Break deposit is situated on the company’s 7,050 hectare McKenzie Break property and is 20 km north of Monarch Mining’s fully permitted 750-tonne-per-day Beacon mill.

The deposit has open pit and underground indicated resources of 1.83 million tonnes grading 2.48 grams gold per tonne for 145,982 oz. of contained gold and inferred resources of 3.33 million tonnes grading 2.34 grams gold per tonne for 250,593 ounces.

The company has completed about 15,765 metres of its 20,000-metre drill program at McKenzie Break, with one drill currently turning at the site. Lacoste says that the shallow intercepts point to the potential for a larger open-pit operation at the project than had been first anticipated, but the company remains intent on taking a methodical path forward in exploring the asset.

“We’re doing a surgical approach,” says Lacoste of Monarch’s drill campaign. “We don’t have the budget of [others]. We don’t want to be spending so much money that we’re losing focus. We want to make sure we drill nice and easy, but surgical, going after geophysics. It’s giving us a chance to not make big mistakes and not to overspend the money that we have, which we can go [with] until December 2022.”

For Lacoste, McKenzie Break brings to mind a previous project he was involved with, the Magino gold deposit in northern Ontario.

“It reminds me a lot of the Magino deposit, which, when I was CEO of Golden Goose [Resources], we brought from 200,000 oz. to 2.2 million oz. That was sold successfully to Argonaut Gold for $350 million in 2012.”

Monarch Mining was spun out of Monarch Gold in November 2020after Monarch Gold was acquired by Yamana Gold (TSX: YRI; NYSE: AUY; LSE: AUY) for $152 million that same month. As part of the deal, Monarch Mining retained McKenzie Break and several other assets.

Monarch Mining’s wholly-owned assets are all located in the Abitibi camp and within close proximity to its Beacon mill, 15 km east of Val-d’Or. The mill has been on care and maintenance since July 2016.

The company’s past-producing and fully permitted Beaufor underground mine is located less than 10 km from the Beacon mill, and has also been idle since June 2019. However, earlier this year the government of Quebec granted Monarch a $13.5 million senior secured loan to help the company restart both Beaufor and Beacon, something Lacoste says is coming soon.

“The plan is to have both Beaufor and Beacon up and running by the beginning of 2022. With Beaufor, we started developing some galleries back on September 1, so we’re now two months into development, and we expect to start mining at the end of December. The mill itself is scheduled that we turn on the switch December 1. It could go on and off a few times, but we’re hopeful that the mill will be full throttle early next year and produce our first doré bar sometime in the first quarter of 2022. Maybe let’s be romantic and say Valentine’s Day. And commercial production would probably begin in the second quarter.”

Monarch’s other assets in Quebec are the Swanson property, located about 65 km north of Val-d’Or, and the Croiner gold property, located about 55 km east of the city. In combination with McKenzie Break and Beaufor, Lacoste says they form a hub and spoke operation centred around the Beacon mill.

Lacoste says that Monarch remains open to all options when it comes to McKenzie Break and its other assets in Quebec.

“Yes, we’re a little bit more independent, we have access to capital now. But we answer every call we get. We study every proposal. We’ve signed a few non-disclosure agreements. And the fact is, you know, juniors to mid-tiers are now getting smart to the game. I think this is a positive sign for the industry as a whole. But you’ve got to have skin in the game. Management with skin in the game is very important. Like us.”

At presstime, Monarch Mining was trading at 78¢ per share, in a 52-week range of 59¢ to $1.31. The company has 78 million common shares outstanding for a market cap of $61 million.