Monument Mining raising $38m to advance toward gold production in Malaysia

Monument Mining (MMY-V) is raising $38 million to move its 100%-owned Selinsing gold project in Malaysia toward production.

Speaking in a Richmond Club event in Toronto, CEO Robert Baldock says that the project has 231,000 oz. gold in the indicated category, comprising 4.8 million tonnes grading 1.5 gram gold per tonne, plus 388,000 oz. gold in the inferred category, comprising 10.3 million tonnes grading 1.17 gram gold per tonne. The resources conform to National Instrument 43-101.

The resource is near surface, and it can be mined as an open pit. Monument Mining plans to use a carbon-in-leach circuit, and metallurgical tests indicate gold recoveries of 92% to 95%. The company plans to start production in the first quarter of 2009.

Baldock is hopeful that resources in the Selinsing project can be increased through exploration of the Damar Buffalo Reef project, which is contiguous with the Selinsing project, and which forms a 4.2 km-long mineralized trend with Selinsing. Monument Mining’s estimate of the gold resources at Damar Buffalo Reef , which does not conform to NI 43-101 (it conforms to JOIC, the Australian standard), is 185,000 oz. gold, comprising 1.9 million tonnes grading 2.49 grams gold per tonne in the indicated category, plus 568,000 tonnes grading 1.62 gram gold per tonne in the inferred category.

Baldock anticipates that $28 million will be raised in equity, and $10 million in convertible notes. Besides advancing the Selinsing project to production, he is hoping to negotiate the purchase of exploration rights for an additional 32,000 acres in the area, as well as a database of exploration results from previous owners. The money should be sufficient for these purchases as well.

Baldock likes Malaysia for its political stability and its competitive labour costs. He says that the Selinsing project is subject to a 5% government royalty. The Damar Buffalo Reef project is subject to the same 5% royalty, plus a 2% state government royalty.