JOHANNESBURG (miningweekly.com) – TSX-V-listed Monument’s business strategy is working to its advantage in the challenging economic environment, said president and CEO Robert Baldock when commenting on the gold producer’s financial results for the first quarter of fiscal 2015.

"Fiscal 2015 started with the continuing decline in the gold price and other metals, which is of considerable concern to shareholders and the entire investment market,” he noted.

Countering this was Monument’s continued low cash cost gold production at Selinsing, Malaysia, through optimising the plant performance and work to build up sustainable cash flow down the road through research and development (R&D) work on treating sulphide gold ore materials at Selinsing; resource exploration at the Murchison gold project and in the Malaysia region; work on producing iron and copper at Mengapur, in Pahang state of Malaysia; and the continued strategic acquisition of mineral resources around the Murchison and Gascoyne regions, in Western Australia. 

“[Further], with the sharp decline of the iron-ore market and predictions that low iron is here for some years to come owing to oversupply, we have had to rethink our focus on production of iron as a main marketable product and, while not abandoning iron, will concentrate and refocus on high-grade magnetite and copper.  Our continuing testwork and upgrading of the sulphide copper flotation plant will bring opportunity for additional cash flow."

For the first quarter financial results for the three months ended September 30, Monument reported gold production of 9 745 oz, down compared with the 10 515 oz of the fiscal 2014 first quarter, while cash cost an ounce for the period was $699/oz, up on the $503/oz recorded for the previous first quarter. 

The company’s gross revenue for the quarter under review from the sale of 6 300 oz of gold was $8.18-million, cut in half compared with the previous comparable period’s $16-million.

Monument’s profit margin generated from gold production was $2.10-million, a decrease compared with the $7.33-million of the first quarter of fiscal 2014; however, ore processed increased by 8% to 253 514 t compared with the previous comparable period.

The company cited a processing recovery rate of 84.4%, which was an increase of 6% compared with the first quarter of fiscal 2014.

RESEARCH & DEVELOPMENT

Ore processed during the first quarter continued with low-grade oxide and leachable sulphide material. Testwork was also continued throughout the quarter on treatment of refractory sulphide materials.

“The company has engaged additional highly experienced senior metallurgists to carry out parallel studies for several alternatives, including a flotation approach to produce gold or gold concentrate, plus a halide leaching and bioheap leaching approach without flotation, aimed to reduce capital investment,” adds Monument.

Meanwhile, the Mengapur project continued to represent a very significant opportunity for a long-term mining asset owned by Monument with downstream commodity products.

A preliminary economic assessment study was started during the prior fiscal year and was planned to be completed in fiscal 2015, but was subject to and pending approval and issue of the mining lease or leases from Pahang state to Star Destiny, a 100% owned subsidiary of Monument. Management continued its dialogue with Pahang state authorities to advance this process.

During the quarter, the company completed resource definition drilling for oxide iron materials in the overburden of Area C of the Mengapur project. Construction of the front-end iron magnetic separation and copper flotation circuit to the existing sulphide copper flotation pilot plant was ongoing during the first quarter to separate iron from copper. However, the recent dramatic downward trend in iron-ore prices and depressed outlook for iron-ore had brought copper production to the fore as a priority.

R&D testwork showed there might be potentially economic quantities of recoverable oxide copper ores in the topsoil in the same area.

During the first quarter Monument initiated a study on oxide copper resources in the topsoil. Testwork also continued on existing sulphide copper materials in the skarn, which offered Monument the opportunity to produce a copper sulphate crystal product using the sulphide copper flotation plant.

Subsequent to the first quarter, engineering design work started to add additional float cells to the nominal 1 000 t/d sulphide copper flotation process pilot plant. Further work on mineable tonnes and grade needed to be completed for Monument to make a decision on an exploitation strategy at Mengapur.    

EXPLORATION
“Fiscal 2015 exploration is focused on replacing oxide ore and further studies of regional geological structures to effectively define new targets at the Selinsing and Buffalo Reef areas,” explained Monument.

The first quarter of fiscal 2015 started with two Desco drill rigs completing exploration drilling at the northwestern edge of the Selinsing pit 6 and sterilisation drilling at Buffalo Reef South, and then focused on the Perangih prospect and West Panau area along trend from Buffalo Reef North.

A total of 19 drill holes were drilled totalling 1 928 m, of which two holes were ongoing subsequent to the quarter. Twelve drill holes were logged for a total of 1 242.8 m and 1 944 samples were dispatched to the SGS-Mengapur laboratory. “These will be followed up with further mapping in Perangih, Buffalo South and other areas to support geological interpretation in the following quarter,” stated Monument.

The company had engaged geological solutions provider Model Earth to conduct geological studies, including structural studies, to assist in optimisation of the drilling programme and to provide in-house training to staff geologists.

Exploration activities at Murchison during the quarter included the completion of the initial drill programme that was designed to validate the historical resource, increase the grade and geological continuity of the mineralisation through infill drilling, test for resource extensions and define further exploration targets.

The initial programme consisted of 102 reverse circulation (RC) drill holes totalling 9 340 m at Alliance and New Alliance. During the quarter, Monument also started drilling on