Monarch Mining (TSX: GBAR) is the latest junior mining company to effectively go belly up, after the firm today revealed that it has been served with a prior notice of exercise of a hypothecary right by Investissement Quebec.
The exercise of the right relates to loans granted by Investissement Quebec back in 2021. The loan, amounting to $13.5 million when it was granted, was to enable the company to restart the Beaufor Mine and Beacon Mill. The funding was anticipated to assist in an economic recovery of the Abitibi-Temiscamingue region, with the projects expected to lead to 100 jobs in the region.
The mine and mill however were plagued by mechanical and procurement issues, on top of discrepancies between reported grades at the mine and what was processed at the mill, leading to the Beaufor Mine being put on care and maintenance before operations even ramped up in September 2022. The company at the time reported it would also be undergoing a strategic review to attempt to fix its operations.
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READ: Monarch Mining Places Beaufor Mine On Care And Maintenance
The most recent financial statements meanwhile identified that the firms cash position had dwindled to just $231,000, while the company posted an overall loss of $22.7 million, thanks in part to a $24.0 million writedown of its assets.
As it stands today, the loan with Investissement Quebec stands at $10.1 million. The hypothecary right associated with the loan meanwhile was secured by an encumbrance on all of the present and future, tangible and intangible assets of the corporation. As of June 30, total assets of Monarch sat at $45.7 million, versus liabilities of $36.2 million.
Monarch has indicated it is currently assessing the “range of possibilities that are available to it.”
Monarch Mining last traded at $0.01 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
