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Monarch exploring custom-milling deal with Glencore

May 14, 2020

It's a head-turner. A Quebec-based gold miner has signed a deal with Glencore Canada to potentially process its ore in Timmins.  

MONARCH GOLD CORPORATION has announced that it has entered into a memorandum of understanding with Glencore Canada Corporation for the potential use of Glencore’s Kidd concentrator for the treatment of ore to be mined from Monarch’s Wasamac gold property in Québec.

Here’s a summary of the MOU, which includes a four-phase work plan to be executed by Monarch:

Phase 1 – Upgrading Study: Monarch will launch a study on upgrading the Concentrator, or part thereof, and related infrastructure to ship the ore from the Wasamac property by railway to have it processed and transformed into dore bars at the Concentrator (the “Upgrading Study”). The Upgrading Study will be funded by Monarch and shall be completed by December 31, 2020 at the latest.

Phase 2 – Negotiation and Signing of a Toll Milling Agreement: If the parties agree that the results of the Upgrading Study are positive for each of their interests, Monarch and Glencore will negotiate in good faith to enter into a toll milling agreement (the “Toll Milling Agreement”). The Toll Milling Agreement shall be executed by March 30, 2021 at the latest, failing which Glencore shall have no further obligations hereunder.

Phase 3 – Concentrator Upgrading Work: Further to the execution of the Toll Milling Agreement, Monarch will fund the work to upgrade the Concentrator and related infrastructure. Phase 3 shall be completed by the end of July 2023 at the latest.

Phase 4 – Performance of the Toll Milling Services: Once Phase 3 is completed, Monarch will ship the ore from its Wasamac property to the Concentrator and Glencore will process it in compliance with the Toll Milling Agreement between the parties. The first delivery of ore from the Wasamac property to the Concentrator shall take place by or prior to December 31, 2023.

In the coming weeks, Monarch will retain the services of one or more consultants to perform the Upgrading Study.

Glencore has been tightlipped about its life of mine status. The Geneva-based global commodities company confirmed several years ago that the historic Kidd Creek Mine would close by 2022. Not long after, the company also conceded that deep drilling at the 55 year old mine north of Timmins opened the possibility to a life of mine beyond 2022.  

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