The Beaufor mine
The share price of Monarch Mining fell by 50% on Friday, as the company announced that creditor Investissement Quebec (IQ) intended to use its legal right to claim the miner’s assets as collateral for C$10-million in debt owed.
Monarch explained that IQ had given it “prior notice that of a hypothecary right”.
IQ has a hypothecary right, or claim, on Monarch’s assets to secure the loans that it has given to the company. The lien is on all Monarch’s present and future assets, both tangible and intangible, movable and immovable.
Monarch said that it was “assessing a range of possibilities” that were available to it.
The gold mining company owns three projects, including the Beaufor mine that is currently on care and maintenance. Other assets include the McKenzie Break and Swanson properties, all located near the Beacon mill.
Monarch owns 14 316 ha of mining assets in the prolific Abitibi mining camp that host a combined measured and indicated gold resource of 478 982 oz and a combined inferred resource of 383 393 oz.
Monarch at the end of August started slowing down its mining activities at Beaufor, after a slower ramp-up of the mill following a number of mechanical and procurement issues, as well as problems with the grade reconciliation of the material stockpiled, caused by cash restrictions.
In September, the mine was placed on care and maintenance.
The TSX-listed miner lost 50% of its value, closing at C$0.005 a share on Friday.