Monarch Mining (TSX: GBAR) is evidently having operational and cash problems. The firm last night revealed it will “slow down mining operations” at the Beaufor Mine, which is largely a result of poor performance at the Beacon Mill.
Notably, operations at the Beacon Mill will not be impacted. Restart and ramp-up of the mill appears to be one of the leading problems, with the facility operating at 50% for the months of July and August. Evidently the issues with the operation are numerous, including mechanical and procurement problems, COVID-19, and technical problems with grade reconciliation of the ore that has been stockpiled.
To add insult to injury, the stockpiled ore has been grading lower than the company expected, which has lead to reduced cash flow from operations, on top of the facility running at only 50% of its 750 tpd nameplate capacity. With this reduction in cash flow, referred to by the firm as a “short-term cash restriction,” Monarch is slowing down production from the Beaufor Mine, while working to rejig its mining methods for less dilution.
The reduction in operations follows the first gold pour from the mine being announced just a month ago on July 27. At the time, the firm indicated it had a record day of 765 tonnes of ore processed, at a recovery rate between 96.3% and 98.7%. Processing at the mill began in early July, after six weeks of fine-tuning the facility.
“Over the next few weeks, our team will be working relentlessly to find solutions to resolve these issues and to get the plant running at full capacity. During this period, which we believe to be temporary, we will continue to process the more than 20,000 tonnes of ore stockpiled at the Beacon Mill and Beaufor Mine sites in order to generate the funds required for our operations,” said CEO Jean-Marc Lacoste.
The company last reported a cash position of $6.1 million within its third quarter results, for the period ended March 31, 2022.
Monarch Mining last traded at $0.38 on the TSX Venture.
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