Monarch takes flight as Camorra overcomes initial problems

Despite operational difficulties at its Camorra gold mine in Venezuela, Monarch Resources (TSE) managed to produce a record amount of the yellow metal in 1994.

Venezuela’s largest private gold mining company cranked out almost 41,000 oz. from the Camorra mine and Revemin processing mill.

Monarch brought the mine into production in August, 1994, at a capital cost of US$25 million. Situated 120 km southeast of El Callao, the operation is within a block of concessions, controlled by Monarch, that total 14,000 hectares.

Although the mine was designed to yield 80,000 oz. from 135,000 tonnes of ore per year, at a cash cost of less than US$200 per oz., operating results fell well below anticipated levels. Indeed, production for the year amounted to only 12,467 oz. at a cash cost of US$255 per oz.

The shortfall was caused by several factors, including prolonged power outages, a shortage of skilled labor, incomplete modifications to the mill, and a lower-than-expected average grade from open-pit ore.

In contrast, however, the first quarter of 1995 was marked by sure signs of progress.

Monarch and local power authorities developed a more reliable power source; an adequate number of skilled underground miners were hired; process flow modifications were completed; and the company began mining higher-grade ore from underground operations.

Monarch’s other Venezuelan asset, the Revemin carbon-in-pulp mill, was commissioned in 1989 for the purpose of processing tailings.

In 1993, the company added a crushing unit so that the mill could process hard-rock feed from third-party sources, or from Monarch’s other concessions. As a result, gold production rose to 28,374 oz. at a cash operating cost of US$293 per oz.

The Caracas-based company is now searching for additional sources of hard-rock feed in order to reach the design throughput rate of 180,000 tonnes per year. In February, it signed a letter of intent with El Callao Mining (VSE) to supply up to 7,500 tonnes of hard-rock feed per month from that company’s Lo Increible property, 5 km northeast of Revemin. The contract, subject to El Callao’s obtaining the necessary permits, will be valid for one year and could provide enough feed for up to half of Revemin’s capacity.

Monarch is one of Venezuela’s most active exploration companies, holding more than 32,000 hectares in the Botanamo, Pastora and Bochinche greenstone belts in Bolivar state. In 1995, the company plans to spend up to $8 million on exploration, most of it in Venezuela.

The principal exploration target is the Camorra mine itself, where reserves are defined within an area with a strike length of 300 metres and to a depth of 300 metres. Deep drilling is providing data on material below known reserves to a depth of 500 metres.

Results from the drilling, combined with underground development, have enabled Monarch to expand reserves to 553,000 oz. from 400,000.

The drilling has also intersected two vein structures, known as the as the Vicky and Betzy veins, in the hangingwall. Several intersections in these veins averaged between 20 and 40 grams per tonne over minable widths. Although additional work is needed to evaluate the potential of these structures, Monarch remains confident that Camorra will become a 1-million-oz. deposit.

Another area of interest, the Canaima property, is situated 6 km east of the mine. This advanced-staged exploration project has an in situ geological resource of 230,000 oz. gold to a depth of 200 metres, including 28,000 oz. which were mined from the Canaima open pit and processed at Revemin.

Monarch drilled to test for extensions of the known oreshoots to a depth of 350 metres. Based on these results, the in situ geological resource, at 433,000 oz., has almost doubled. Monarch is considering installing a small, underground operation at Canaima.

Meanwhile, in an effort to diversify geographically, Monarch has opened a field office in Mexico’s Durango state. The company already holds land positions in the area, namely the Rodeo and Sabinas concessions. It recently staked and filed applications for a 100% interest in three continuous claim blocks totaling 36,000 hectares just northeast of town.

The new office will allow greater flexibility and accessibility to these projects, and to others in neighboring Zacatecas state.

The recently staked claims, which lie within a caldera setting, have the ability to host various bulk-tonnage or narrow-vein deposits, including hot springs, stockwork and bonanza veins, as well as skarn and replacement bodies.

Rock chip sampling has identified three targets, and further field work is likely to produce more. Drill programs will test these targets later in the year.

Farther south, in Argentina, Monarch has entered a joint-venture agreement with Solitario Resources (TSE) to earn a 51% interest in the 10,000-hectare Gualilan property in San Juan province.

The property is said to have potential for hosting large, disseminated, skarn-type gold deposits. Earlier this year, several large, airborne magnetic anomalies were outlined. Mapping and sampling will begin shortly, to be followed by initial drilling in the second half of 1995.