"TORONTO (miningweekly.com) – Vancouver-based Monument Mining, which agreed to buy the Malaysian Mengapur polymetalic project for $50-million in May, hopes to reach a construction decision by the end of 2013, CEO Robert Baldock said on Friday.
While Normet Engineering completed a feasibility study on Mengapur in 1990 for the Malaysian government, the report is not compliant with modern standards, and Baldock said Monument would complete a new updated feasibility study by November next year.
“In parallel with that we’ll be doing engineering, permitting...so by the end of 2013 we would hope that we can make a construction decision,” he said in an interview.
In an earlier presentation to investors, Baldock said that TSX V-listed Monument would pay consultancy Snowden $10-million to conduct a due diligence on Mengapur, which is set to be complete in early November.
The $10-million will also cover the updating of the project’s feasibility study, he said.
The Malaysian government sold it to a private company called Malaco in 1992, after the state decided to focus its resources on the oil and gas sector.
It did so after having spent $40-million on the feasibility study, and Baldock said the $50-million Monument will pay for a 70% stake in Mengapur was “very much a distressed sale price”.
While the mine will largely be a copper project, the historic feasibility study also envisaged production of sulphur, gold, silver, lead, zinc, as well as molybdenum.
According to Baldock, Monument will even consider either sourcing phosphates from another company or acquiring its own resource, with the view to process it with Mengapurs sulphur and manufacture fertilisers, which Malaysia’s world-leading palm oil industry could use.
“We’re out beating the bushes right now,” he commented.
Mengapur will be an open pit mine, with either a 3 000 t/d or 7 000 t/d mill.
“At the moment we’re leaning toward 7 000 t/d,” noted Baldock, who is also the CEO of TSX-listed Yukon-Nevada Gold.
At present prices, he said that there is about $7.5-billion worth of copper at Mengapur.
Based on the 1990 feasibility study’s anticipated 24-year mine life, this would generate yearly revenues of around $312-million at current copper prices, at a production rate of some 78-million pounds a year of the red metal.
GOLD OPERATION
If the updated feasibility study proves Mengapur to be economic at today’s metal prices – which are significantly higher than they were in 1990 – the project would become Monument’s second operation, the first being the Selinsing gold mine.
That asset started producing bullion commercially in September last year, and produced 44 000 oz in its first nine months of operation.
The company aims to complete the phase-three expansion at Selinsing by May 2012, which will lift production to around 75 000 oz/y.
Addressing potential investor concerns that a gold company was buying the polymetallic Mengapur project, Baldock said the objective was to diversify into different products, to protect sales in case the gold price declined.
He also said the project was a solid one that would likely deliver big profits, and that investors shouldn’t complain about that.
“I expect none of them will send their dividend cheques back,” Baldock quipped.
Shares in Monument were down 1.6% on Monday morning at C$0.61 apiece, valuing the company at C$106-million."
Thread abonnieren
