Monarques to acquire gold properties from Agnico

Monarques Gold (TSXV: MQR; US-OTC: MRQRF) is set to acquire the McKenzie Break and Swanson gold properties from Agnico Eagle Mines (TSX: AEM; NYSE: AEM). The agreement brings Monarques’ Quebec land package to 300 sq. km.

Both properties host near-surface gold deposits, with historical resource estimates situated close to Monarques’ Beacon and Camflo mills. Neither site has been drilled deeply, however, with holes at McKenzie averaging 150 metres.

“The idea behind those acquisitions is to ensure we have a full pipeline of projects to make sure that we could fill in the two mills in the coming years,” Monarques Gold CEO Jean-Marc Lacoste says in a telephone interview with The Northern Miner.

The McKenzie property is 40 km north of the Beacon mill and 25 km north of Val-d’Or. It consists of nine claims covering 3.4 sq. km, accessible by road year-round.

A historical 1991 estimate stands at 800,000 tonnes grading 6.63 grams gold per tonne for a total 173,500 oz. gold at a 1.7 gram gold cut-off grade. In 1994, another estimate calculated 160,000 tonnes at 10.86 grams gold using a 3.5 grams gold cut-off for 56,300 indicated oz. gold. So far, 37,800 metres have been drilled at McKenzie in 258 holes.

Monarques’ Quebec land package has grown considerably over the past several months. Credit: Monarques Gold.

“The main focus should be McKenzie Break, followed by Swanson,” Lacoste says. “Swanson is more of a long-term project. But the McKenzie Break already has a ramp that was built in 2012 and it’s got access to the mineralization. So phase one at McKenzie Break will be to dewater and get to understand the system better.”

The Swanson property is 65 km north of the Beacon mill. It holds one mineral lease and 129 claims covering 51 square kilometres. Compared to McKenzie it is relatively unexplored. A railway crosses the property, as does a transmission line.

As of a 1985 historical estimate, Swanson contains 815,000 inferred tonnes grading 3.71 grams gold for 91,200 oz. gold.

Both properties are connected to the Beacon mill by back roads. Lacoste points out that ore from Swanson could be sent by train down to Beacon, which sits only 400 metres from the train tracks.

The Beacon mill is fully built and permitted, but has been on care and maintenance for the last five years. Lacoste says it would take $2 million to get the mill up and running again.

The Beacon mill is currently on care and maintenance, but Monarques hopes to have it up and running by the end of the year. Credit: Monarques Gold.

“Our goal is to have the Beacon mill ready by the end of 2018, so we’ll have more options,” Lacoste says. “The Beaufor (ore) could be milled at the Beacon mill, leaving more room to the Camflo mill because we have a bit of a line-up with clients to go to the Camflo mill.”

Monarques will acquire the properties from Agnico for $1.6 million in cash and $3 million in shares. Agnico was entitled to a 1.5% net smelter return royalty on each property, but Monarques bought it back on McKenzie Break for US$50,000 cash and 600,000 shares.

“The good news is, when you get something from Agnico, it comes with data rooms full of information and engineering,” Lacoste says. “If you look at the Swanson property, they actually took it almost to production. We have a lot of information, we understand the pit shape — all these things have been done for us.”

Monarques has several exploration assets as well as the producing, underground Beaufor mine located 20 km northeast of Val-d’Or, which produced 19,662 oz. gold in 2016.

Monarques acquired Beaufor and the Camflo mill as well as several other properties in a deal with Richmont Mines (TSX: RIC; NYSE: RIC) that closed in October 2017. It poured its first gold later that month.

Lacoste says the focus for early 2018 will be on its wholly owned Croinor property. Croinor has 541,000 proven and probable tonnes grading 6.77 grams gold per tonne for 117,870 oz. gold.

“The beauty with Croinor is there’s no limit on the bulk sample,” Lacoste says. “Because we have the permits in place for mining, we can just go in and do any amount of bulk sampling we want to do, and that’s going to help us understand Croinor a lot better. So that might be the number-one position for flow-through money in 2018.”

Monarques shares are trading at 30¢ with a 52-week range of 25¢ to 49¢. The company has a $63-million market capitalization.