Mining company, Monarch Gold Mining (MON) said on Friday it acquired a $65 million Mount Magnet Gold Operations project in Western Australia.
It has acquired the project from South African based Harmony Gold Mining Company and includes four mines.
Monarch plans to allocate $10 million per year for the next two years into exploration efforts.
The $65 million is made up of cash, equity and convertible notes.
"This is a significant step toward achieving our goal of becoming a 500,000 ounce per annum gold producer by 2009 and this project will provide a substantial contribution to profit for Monarch shareholders," Monarch Chairman Michael Kiernan said.
The acquisition will be added to Monarch's existing projects in the WA Goldfields region, where it is the largest independent landholder.
Its projects include two ‘world-class' mining projects – Davyhurst/Mt Ida and Hill 50 – "and with the gold price now surpassing US$800 per ounce, we are well positioned to capitalise on the potential of these historic projects", Kiernan said.
"Harmony views Monarch as being the best -placed gold mining company to drive this project forward, and with a significant equity interest in the development of the project, we have confidence that there is long term value in the project under the Monarch umbrella," he added.
Monarch plan to be listed on the Toronto Stock Exchange (TSX) in early 2008 and the capital raised in the float will be used to partly fund the acquisition.
Earlier in the week, Monarch announced it hit high grade gold at Davyhurst's Iguana Gold Deposit, however the news had little effect on the share price, with the stock only gaining 1c on the day to 26 cents.
Today, Monarch traded in a range 25.5 cents and 27 cents, amid a high volume turnover six times the daily average of 1,715,660.
Monarch Gold Mining is an emerging gold producer and exploration company, with tenements mainly in Australia. Key projects are located in the Lake Johnston Greenstone Belt and Eastern Goldfields region of Western Australia.
MON closed 3.8% down at 25 cents.
