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Monument Mining Ltd
Symbol MMY
Shares Issued 326,838,233
Close 2022-09-22 C$ 0.065
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Monument Mining loses $6.49M (U.S.) in fiscal 2022

2022-09-23 20:43 ET - News Release

Ms. Cathy Zhai reports

MONUMENT REPORTS FOURTH QUARTER AND FISCAL 2022 RESULTS

Monument Mining Ltd. has released its annual financial results for the year ended June 30, 2022. All amounts are in U.S. dollars unless otherwise indicated (refer to SEDAR for full financial results).

In fiscal 2022, with the restructured gold-focused portfolio, Monument Mining concentrated on flotation plant construction at the Selinsing gold mine with 69-per-cent completion, and the phase 1 and phase 2 drilling programs at the Burnakura project for new gold, which have been completed subsequent to the fiscal 2022. The corporate development is focused on identification of gold acquisition targets.

Cathy Zhai, the president and chief executive officer, commented, "We are pleased to see in fiscal 2022, the Murchison project progressed exploration as planned, phase 1 drilling led to the discovery of a high-grade near-surface Junction target, and the phase 2 drilling confirmed extensions to known mineralization of existing resources with high potential to enhance its production scale and economics."

Ms. Zhai further commented: "Selinsing flotation plant construction in general progressed smoothly. The challenges of the Shanghai COVID-19 lockdown and the worldwide shipping blockage, however, caused delay of commissioning from June 30 to late November, 2022. The concentrate market is hot, and we have made good progress towards an offtake arrangement. Our cash position is adequate to complete the construction even though Selinsing gold production was volatile during fiscal 2022 and not able to fund development activities."

Fourth quarter highlights:

  • Selinsing sulphide project development continued to progress, civil work for flotation plant foundation was completed, and the long-lead major items of flotation cells, agitators, pumps and thickeners were delivered and installed.
  • Selinsing mining rates were volatile primarily due to depletion of oxide ore transiting to sulphide production:
    • 1,942 ounces of gold produced (fourth quarter fiscal 2021: 1,838 oz);
    • 450 oz of gold sold for $850,000 (Q4 fiscal 2021: 3,473 oz for $6.08-million);
    • Average annual gold price realized at $1,890 per oz (Q4 fiscal 2021: $1,812 per oz);
    • Cash cost per ounce sold was $1,282 per oz (Q4 fiscal 2021: $1,386 per oz);
    • Gross margin decreased by 78 per cent to $270,000 (Q4 fiscal 2021: $1.27-million);
    • All-in sustaining cost (AISC) increased to $2,221 per oz (Q4 fiscal 2021: $1,647 per oz).

Fiscal year 2022 highlights:

  • Murchison phase 2 drilling completed subsequent to the year ended June 30, 2022, confirming continuity of gold mineralization at Burnakura;
  • Selinsing sulphide project development 69-per-cent completion with delay in commissioning due to Shanghai COVID-19 shutdown and shipping;
  • Selinsing mining rates were volatile primarily due to depletion of oxide ore transiting to sulphide production:
    • 7,091 oz of gold produced (fiscal 2021: 10,282 oz);
    • 8,016 oz of gold sold for $14.44-million (fiscal 2021: 12,850 oz for $23.24-million);
    • Average annual gold price realized at $1,870 per oz (fiscal 2021: $1,864 per oz);
    • Cash cost per ounce sold was $1,723 per oz (fiscal 2021: $1,178 per oz);
    • Gross margin decreased by 92 per cent to $630,000 (fiscal 2021: $8.10-million);
  • All-in sustaining cost increased to $2,175 per oz (fiscal 2021: $1,425 per oz).

Fourth quarter results

Production analysis:

  • Q4 fiscal 2022 gold production of 1,942 oz, a 6-per-cent increase as compared with 1,838 oz for Q4 fiscal 2021. This increase resulted from a higher feed grade and more ore processed.
  • Q4 fiscal 2022 ore processed increased to 119,409 tonnes from 94,940 tonnes for Q4 fiscal 2021. The increase is due to the impact of COVID-19-related closures in Q4 fiscal 2021 and the operation resuming in fiscal 2022.
  • Q4 fiscal 2022 total production costs were $580,000 as compared with $4.82-million for Q4 fiscal 2021. Cash cost per ounce decreased by 7 per cent to $1,282 per oz as compared with $1,386 per oz of Q4 fiscal 2021. The decrease was attributable to less waste removed, higher feed grade, and more ore processed and gold produced.

Financial analysis:

  • Q4 fiscal 2022 gold sales generated revenue of $850,000 as compared with $6.08-million from Q4 fiscal 2021. Gold sales revenue was derived from the sale of 450 oz (Q4 fiscal 2021: 2,750 oz) of gold at an average realized gold price of $1,890 per ounce (Q4 fiscal 2021: $1,812 per ounce). There was no gold prepaid delivery for Q4 fiscal 2022 (Q4 fiscal 2021: 723 oz at $1,525 per ounce).
  • Q4 fiscal 2022 mining operations before non-cash amortization and depreciation generated a gross margin of $270,000, a decrease of 78 per cent from $1.27-million in Q4 fiscal 2021. The decrease in gross margin was attributable to the decrease in gold sold offset by a higher average realized gold price.
  • Cash outflow from investing activities for Q4 fiscal 2022 was $2.25-million (Q4 fiscal 2021: inflow of $28.44-million, which was mainly from the sale of the Mengapur project of $29.16-million and the sale of 80-per-cent interest in Tuckanarra project of $2.66-million).

Fiscal year 2022 results

2022 gold production

Production analysis:

  • Gold production of 7,091 oz, a 31-per-cent decrease as compared with 10,282 oz of the previous year. Gold production for the year ended June 30, 2022, was mainly from transitional leachable sulphide ore from Selinsing Pit 4, oxide mineralized materials from Peranggih and old tailings materials. This resulted in lower mill feed grades but slightly higher recovery rates.
  • Two thousand twenty-two mining activities delivered 355,519 tonnes of ore from Selinsing (198,689 tonnes), Buffalo Reef (4,205 tonnes) and Peranggih (152,625 tonnes). Mining costs for Peranggih were recorded against inventories for 152,625 tonnes during the year, of which 147,598 tonnes were fed into the mill.
  • Ore processed decreased to 544,003 tonnes from 579,569 tonnes last year. The decrease was due to the lack of availability of stockpiled ore. Ore stockpile has significantly been reduced mainly due to the adverse impact of the oxide materials being depleted and in transition to flotation production, which is under construction. The COVID-19 pandemic has not helped in achieving the target. The company has devoted its effort to improve the stockpile balance.
  • Total production costs were $13.81-million as compared with $15.13-million of last year. Cash cost per ounce increased by 46 per cent to $1,723 per oz as compared with $1,178 per oz of last year. The increase was attributable to an 18-per-cent decrease in the mill feed grade from 0.69 gram per tonne to 0.84 gram per tonne as a result of processing significantly more leachable sulphide ore and other low recovery ores, and heavy rainfall in the mine pits, partially offset by an increase in recovery to 62.7 per cent (2021: 60.8 per cent).

Financial analysis:

  • Gold sales generated revenue of $14.44-million for the year as compared with $23.24-million from last year. Gold sales revenue was derived from the sale of 6,329 oz (2021: 10,700 oz) of gold at an average realized gold price of $1,870 per ounce (2021: $1,864 per ounce) and the delivery of 1,687 oz (2021: 2,150 oz) in fulfilling gold prepaid obligations at an average London Fix PM gold price of $1,545 per ounce (2021: $1,525 per ounce).
  • Mining operations before non-cash amortization and depreciation generated a gross margin of $630,000, a decrease of 92 per cent from $8.10-million from the previous year. The decrease in gross margin was attributable to the decrease in gold sold offset by a higher average realized gold price.
  • Cash and cash equivalent balance as at June 30, 2022, was $21.04-million, a decrease of $17.58-million from the balance at June 30, 2021, of $38.62-million. As at June 30, 2022, the company had positive working capital $30.33-million (June 30, 2021: $48.54-million). The decrease in working capital was mainly due to the capital expenditures spent on flotation construction project and Murchison drilling programs.
  • Cash outflow from investing activities for the year was $12.99-million (2021: inflow of $26.87-million, which was mainly from the sale of the Mengapur project of $29.16-million and the sale of a 80-per-cent interest in Tuckanarra project of $2.66-million).

Development

Selinsing gold mine

At Selinsing, development work focused on completion of the phase 1 sulphide project development that includes flotation plant construction and mine development, aimed to produce saleable sulphide gold concentrates. The flotation plant construction includes project management, project validation, flotation design and engineering, procurement, construction, and commissioning. Mine development includes upgrading of tailing storage facilities, pit pushbacks, river diversion and prestripping.

Procurement at Selinsing construction has been delivered, and the flotation cells, agitators, pumps and thickeners have been installed. A major delay was encountered from several long-lead components, which were held up at the factory and at the Shanghai international port due to the Shanghai COVID-19 shutdown. The gearbox and bridge assemble work has been completed and shipped to the Selinsing site subsequent to the year-end in September, 2022. However, the delivery of the fabricated concentrate filter was further delivered for shipment, and an arrival is expected in mid-November, 2022. Completion of commissioning is anticipated in late November, 2022.

At year-end, 69 per cent of the overall project had been completed with costs incurred of $10.46-million. Construction for project included: civil foundation work at the: flotation area, reagent area and concentrate thickener area. Structure steel work has been initiated, and continues for the filter, water recovery thickener, water service facilities, screening and conditioning tower, flocculant plant, and the concentrate thickener areas, which are 75 per cent completed. Sixty per cent of the piping work has been completed, and the work continues to progress. The equipment installation work for flotation cell is nearly completed, while the reagent agitator and tank installation has been completed.

The tailing storage facility (TSF) upgrade continued with the current capacity being adequate for production until May, 2023.

Murchison gold project

At Murchison, development work focused on identifying and testing both regional exploration targets away from known mineralization and extensions to existing resources while continuing to assess early production opportunities.

The company continues to ensure that the plant and other facilities are operationally ready through its care and maintenance program to ensure efficient commissioning in the future. Site accommodations and catering are fully functional in readiness for the company's personnel and mining contractors when a restart is approved.

Exploration

Malaysia

No significant exploration activities were conducted at Selinsing and Buffalo Reef during the fiscal year except for a geological mapping exercise and a grab sampling collection.

During fiscal 2022, the company continued to place grade control drilling at Peranggih, intended to locate minable material to provide additional Selinsing mill feed. Drilling at Peranggih included 1,200 metres over 25 holes to a maximum depth of 70 metres, at a 20-metre-by-20-metre spacing, targeting a steeply dipping high-grade mineralized structure. Approximately 70 per cent of holes have hit gold mineralization above an oxide cut-off (greater than 0.35 g/t gold) at fewer than 50 metres below the surface, defining a mineralized zone 830 m long and 60 m wide. Sixty-six channel samples and 131 grab/float samples were compiled, which tested extensions to known mineralization at Peranggih and 76 grab/float samples at Selinsing.

Western Australia

In fiscal 2022, as part of a two-year exploration program to test the potential for additional gold discovery, the company completed phase 1 and phase 2 drilling programs. The company tested greenfield targets and extensions to known mineralized structures, and achieved initial objectives with the phase 1 Junction target discovery and the phase 2 drilling confirmation of gold mineralization extensions at depth at the NOA group of deposits, highlighting the opportunity to expand the Murchison project organically.

The phase 1 drilling program included a total of 46 reverse circulation holes for 3,465 m, and a total of 349 aircore holes were completed for 10,484 m. Phase 2 drilling program included a combined 18 RC and diamond drill holes for a total of 5,595 m. The drill programs covered the Munro Bore extension target, the FLC2 and FLC3 prospects, the newly discovered Junction target and the NOA group.

The results from the programs continue to support the company's strategy that potentially could lead to extend the economic mineralization beyond the existing mineral resource and to new discoveries within the Burnakura project area.

About Monument Mining Ltd.

Monument Mining is an established Canadian gold producer that 100 per cent owns and operates the Selinsing gold mine in Malaysia and the Murchison gold project in the Murchison area of Western Australia. It has a 20-per-cent interest in the Tuckanarra gold project jointly owned with Odyssey Gold Ltd. in the same region. The company employs approximately 200 people in both regions, and is committed to the highest standards of environmental management, social responsibility, and health and safety for its employees and neighbouring communities.

We seek Safe Harbor.

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