The Beaufor gold mine, in Val’d Or, Quebec, is being put on care and maintenance for “an undetermined period”, owner Monarch Mining said on Tuesday, citing financial and operational challenges.
The TSX-listed company at the end of last month 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 cash restrictions.
Following a review of its operations, Monarch has now received confirmation of continuing significant discrepancies between the reported grade of the material mined at Beaufor and the grade of material processed at the Beacon mil, which is causing continued lower cash flow from operations than expected and generating insufficient funds for the corporation to continue its operations.
Monarch will continue to process the estimated stockpile of 20 000 t to generate funds before also placing the Beacon mill on care and maintenance.
“The decision taken today by the board and management was after careful consideration of all available information from the mine and mill operations, and the Corporation current and projected financial situation. We understand that this situation is difficult for our shareholders, employees and stakeholders,” said president and CEO Jean-Marc Lacoste.
“We will continue to work towards resolving the present situation at the operations while seeking strategic and financial alternatives to maximize stakeholder value.”
The Beaufor mine produced its first gold at the end of July.
Monarch’s share price closed 11% down at a 52-week low of C$0.12 apiece.