MON - Monarch Gold Mining

[roka]

Interesting article in todays SMH:

Struggling to deliver
Unlike Integra, Monarch Gold's aim was always to get into production as soon as possible to build an ambitious 500,000 ounce a year producer under the leadership of the chairman Michael Kiernan, who made his name as a manganese miner. His strategy was to consolidate old, unloved assets and blend high-grade and low-grade ore to keep costs down to reasonable levels.
But so far things have not panned out as planned, and it produced just 6500 ounces during the March quarter.

As Cairns notes, goldmines usually close for a reason, and while the gold price has risen, so have costs. Monarch hopes to keep its cash costs below $700 an ounce, which is on the higher end of the curve.

Monarch has borrowed millions of dollars from other companies in Kiernan's empire, such as Territory Resources and India Resources, and Territory has taken a 19 per cent stake in a failed attempt to shore up the goldminer's share price while it conducted capital raisings.

In the March quarter Monarch borrowed $15 million from Territory and had only $630,000 left in the bank before a rights issue last month. It also owes money to India Resources and was cash-flow negative to the tune of $15.5 million.

Kiernan acknowledged there was a "lack of confidence in the company" since it hadn't met its glowing forecasts. He said Monarch hoped to produce 7200 ounces this month to break even for the first time.

http://business.smh.com.au/digging-deep-for-golds-rich-rewards/20080511-2d12.html?page=2

 

[jman2007]

Geez...MON is like watching a guy fall off a roof into a camp fire atm,

As of today MON announced that all open pit operations at Davyhurst are to be suspended due to continuing underperformance (unless future drilling delineates further resources).

The Mt Magnet purchase sounds like it's in a bit of s$$t as well, MON are claiming they still want to go ahead with the purchase, but are currently in "negotiation" with Harmony Gold Australia to try and defer the settlement for a period of time. Clearly feeling the penny pinch I feel.

I dunno about the rest of the ASF community, but is it time to close the doors on this thing and put everyone out of their misery?

jman

 

[prawn_86]

MK has never been the most forthcoming with information.

I know i have been critical of him in the past, but he is providing no new reasons for me to change my views.

He seems to focused on his own credibility than the shareholders who theoretically employ him. Resting on past laurels or something to that affect imo.

will be interesting to see how it unfolds, with the TTY interest also.

I wonder what the rest of the boards he is involved with think. probably dont care cause they get paid no matter what

 

[jman2007]

Yes,

I have also been fairly critical of MON throughout this thread, and the latest news is not that surprising in some ways. I'm hoping that there aren't too many ASF members who have been caught holding this, hopefully people were able to draw the right conclusions about what was going on some time ago, despite the sometimes convoluted releases from MK.

jman

 

[So_Cynical]

MON has been on the nose for me since Mt Magnet, i just couldn't figure
how/why the purchase made sense if they were just gona mothball it.

No sense at all.

 

[Miner]

Never mind

Incompetency of MK always pays and do not know why media harp around him.

Very soon there should be a new school of managers comprising of Eddie, Enron Chairman and Directors, MK, Peter Lalor (ex Sons of Gwalia), Directors from Babcock and Centro group. The principal post should go to none but Mr Alan Bond.

To complete the insult to justice the Audit of this new management school could be looked after by ASIC corporate directors as it is handy and they can always turn blind to look after the shareholders interest for whom the share market and businesses are run and bills paid for ASIC as well.

Sorry folks but I have always been critical on Mr MK and his management wisdom (or incompetency) with no care for shareholders. I wonder how his executive members earn so high that they start playing golf and buying million dollar mansions in posh areas in Perth soon joining the organisation. Who pays the bills - of course all of us buying the dud shares.

 

[SM Junkie]

Just to rub salt into the situation, it was reported on GWN news last night about the closure of Davyhurst, it would be a miracle if MON managed to pull themselves out of this one.

 

[grace]

Just to rub salt into the situation, it was reported on GWN news last night about the closure of Davyhurst, it would be a miracle if MON managed to pull themselves out of this one.

Poor old TTY's share price has been dragged down with it! This is not fair on those holders IMO. Glad I jumped out of this boat (lost 1/2 my capital, but could have been much much worse). Not sure what MK will have up his sleeve now???

 

[Miner]

Poor old TTY's share price has been dragged down with it! This is not fair on those holders IMO. Glad I jumped out of this boat (lost 1/2 my capital, but could have been much much worse). Not sure what MK will have up his sleeve now???

Even West Australian has published a long story on MON and so was ABC last night.
I am guessing on trend of MK collapse story will probably be IRL India Resources Ltd a copper production unit in India.

The SP has already plunged to 9 cents considering it listed at 40 cents immediately after IPO and had illuminaries like Crawley Investment (Chris Ellison of MIN), Andrew Forest and few others. Probably they have already sold their stocks and do not belong to top 20 share holders any more.

 

[Miner]

There is a saying of good unwritten code in shipping industry : when the ship sinks every one leaves but the last person to leave the ship is its captain.
Unfortunately corporate world does the exact opposite. When the ship sinks the first person is to get a jail free card is the captain : Director

Today ASX has published Our beloved MK has resigned from IRL (probably he has done enough to ruin IRL and MON and shareholders' money)

Please see the attachment

 

[Lucky_Country]

Looks to me like MON can be saved but will take all of MKs focus.
Maybe has been told we will back you but it must be your only company that you deal with.
Soon see what MK has to say.

 

[SM Junkie]

Our beloved MK has resigned from IRL

And from TTY it seems. It will be interesting to see what happens from here? Has MON still got a future? I guess time will tell. Certaining hanging by a thread.

 

[jman2007]

Interesting

I see TTY have cut off all future sources of funding for MON, and have also appointed a reciever for one of MON's assets. I imagine they will be feeling distinctly uncomfortable about their $18m investment now...

Meanwhile MK has made "mild" threats that unless MON can get $4m quickly to see themselves through the next 4 months, he could call in the administrators, and leave TTY high and dry. Hard position for TTY really, should they call MK's bluff?... they need to stand up to him, but at the same time don't want to walk away from their investment.

I am surprised that MON can remain in suspension for so long, is it possible they would be insolvent at this point? Otherwise it hardly seems ethical to have your stock suspended, just to prevent traders exiting this in a panic, and then potentially have your company's book value based on the last traded price?

Comments guys??

jman

 

[Lucky_Country]

Newspaper reports in the West Australian MON will become Mt Magnet Gold thats if MK has got funding sorted.

 

[2BAD4U]

"Appointment of Voluntary Administrator" - that's todays announcement. Not good for all those still holding. Glad I got out when I did and I will never touch an MK company again.

 

[shanep753]

Yeah 2BAD4U i got caught holding mon.I to will be avoiding any mk company as well.I think i will only hold bigger gold stocks as i got caught by sgw sometime ago

 

[grace]

"Appointment of Voluntary Administrator" - that's todays announcement. Not good for all those still holding. Glad I got out when I did and I will never touch an MK company again.

Glad I missed that too. TTY's share price won't be holding up too well either over the next few days! $20 mill investment isn't it? Not sure if that includes the loans, or just the share investment.

 

[refined silver]

Hmmm! My first stock into admin out of 60+ long term holds over the years.

Only had a small parcel and I knew it was tight, and hightly leveraged. I didn't know though that MK had previously failed also. My own fault, not thorough enough DD.

 

[boundless]

Does anyone think this has a chance of rising from the ashes?

Any comments are welcomed.

Cheers

 

[SM Junkie]

Only if you believe in Miracles. But at least we have had no letters from the administrator YET. So I'll take it as no news is good news.